AUD/USD Forex Technical Analysis – Pivot at .6900 Controlling Direction Today
The Australian Dollar is edging lower on Friday after giving back earlier gains. Yesterday’s surge to the upside and higher close was fueled by a combination of a successful test of the recent main bottom at .6864 and weaker-than-expected U.S. economic data that drove down U.S. Treasury yields, making the greenback a less-attractive investment.
At 07:38 GMT, the AUD/USD is trading .6895, down 0.0006 or -0.07%.
Yesterday’s rally was fueled by short-covering as traders were forced to make position-adjustments due to the weaker-than-expected U.S. manufacturing and services PMI reports that drove up the chances of a Fed rate cut later in the year.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6864 will signal a resumption of the downtrend. The AUD/USD is not in a position to change the main trend to up, but the minor trend could turn up.
A trade through .6935 will change the minor trend to up. This will also shift momentum to the upside.
The minor range is .6864 to .6935. Its 50% level or pivot at .6900 is controlling the short-term direction of the AUD/USD. This is followed by a main Fibonacci level at .6967.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to the pivot at .6900.
Bullish Scenario
A sustained move over .6900 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the minor top at .6935. Taking out this level could trigger an extension of the rally into .6967.
Bearish Scenario
A sustained move under .6900 will signal the presence of sellers. If this move attracts enough sellers then look for the break to extend into the main bottom at .6864.
Taking out .6864 will signal a resumption of the downtrend with the January 3 bottom at .6764 the next likely downside target.
This article was originally posted on FX Empire
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