AUD/USD Forex Technical Analysis – Strengthens Over .7153, Weakens Under .7150

James Hyerczyk

The Australian Dollar finished lower on Friday. Volume and volatility were well below average as investors prepared for the Easter week-end. Australia and the United States were on holiday so most of the major banks and institutions were absent, leading to the limited trade.

The currency also finished lower for the week as investors began pricing in a potential interest rate cut by the Reserve Bank of Australia as early as August. Early in the week, the RBA minutes mentioned it had discussed a rate cut. Mid-week, China announced better-than-expected GDP growth. Late in the week, Australian employment change beat the forecast. Nonetheless, the good news failed to generate enough buying interest to support a gain for the daily or week.

On Friday, the AUD/USD settled at .7151, down 0.0028 or -0.39%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7206 will signal a resumption of the uptrend. The main trend will change to down on a move through .7052.

The minor trend is also up. A trade through .7109 will change the minor trend to down. This will also shift momentum to the downside.

The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is controlling the longer-term direction of the AUD/USD. Traders should treat this area as support.

The intermediate range is .7296 to .7003. Its retracement zone at .7150 to .7184 is resistance.

The short-term range is .7052 to .7206. Its 50% level or pivot at .7129 is additional support.

Another main range is .6764 to .7296. Its retracement zone at .7030 to .6967 is another support zone.

Daily Swing Chart Technical Forecast

Based on last week’s price action and the close at .7151, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at .7153 and the intermediate 50% level at .7150.

Bullish Scenario

A sustained move over .7153 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the Fibonacci level at .7184. Over-taking this level could drive the AUD/USD into a pair of tops at .7206 and .7207. The latter is a potential trigger point for an acceleration to the upside with .7296 the next major upside target.

Bearish Scenario

A sustained move under .7150 will signal the presence of sellers. The next target is a 50% level at .7129. If this fails then look for a test of the minor bottom at .7109. Taking out this bottom will change the minor trend to down and shift momentum to the downside. This could lead to a test of the major 50% level at .7079.

This article was originally posted on FX Empire