The Australian Dollar finished higher on Friday, hitting its best level since March 16 in the process. The move capped off an impressive week given that just a week ago the Aussie was testing a 17-year low at .5510 as global markets went into meltdown.
The Australian economy didn’t improve, but demand for the U.S. Dollar continued to plunge after the U.S. reported a staggering spike of 3.28 million in jobless claims, renewing expectations of additional stimulus from the Federal government. Also helping to drive the greenback lower was Fed Chair Jerome Powell’s promise to lend “aggressively” to cushion the impact of the coronavirus.
On Friday, the AUD/USD is trading .6166, up 0.0110 or +1.81%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .6685 will change the main trend to up. A move through .5510 will signal a resumption of the downtrend.
The minor trend is up. It changed to up on Thursday when buyers took out the minor top at .6073. This shifted momentum to the upside. A trade through .5870 will change the minor trend to down.
The short-term range is .6685 to .5510. Its retracement zone at .6097 to .6236 is controlling the near-term direction of the AUD/USD.
Trader reaction to .6097 to .6236 should set the tone in the market on Monday. We’re looking for a potential acceleration to the upside through .6236 if traders continue to dump U.S. Dollars. With the Fed willing to do whatever it takes to provide credit, the U.S. government giving away $2.2 trillion dollars and expectations of further monetary and fiscal stimulus, we’re looking for momentum to continue to point to the upside.
A breakout over .6236 targets a downtrending Gann angle currently at .6168. A failure to hold the 50% level at .6097 will indicate the return of sellers.
This article was originally posted on FX Empire
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