Yahoo Finance AUD/USD Forex Technical Analysis – Buyers May Return on Test of .7156 to .7123 Retracement Zone
The Australian Dollar was crushed by the stronger U.S. Dollar on Monday. The divergence between the monetary policies of the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia continued to weigh on the currency. This selling started last Wednesday after the RBA and Fed meetings. A steep drop in U.S. equity markets also weighed on investor sentiment, leading to safe-haven demand for the greenback.
The AUD/USD settled at .7173, down 0.0055 or -0.77%.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is starting to shift to the downside. A trade through .7302 will signal a resumption of the uptrend. The main trend changes to down on a trade through .7020.
On the upside, the main retracement zone at .7252 to .7307 is resistance. This zone stopped the rally last week at .7302.
The short-term range is .7020 to .7302. Its retracement zone at .7161 to .7128 is the primary downside target. Since the main trend is up, buyers could step in on the first test of this area. They are going to try to form a secondary higher bottom.
Daily Technical Forecast
Based on Monday’s price action, the direction of the AUD/USD is likely to be determined by trader reaction to the steep downtrending Gann angle at .7222.
A sustained move under .7222 will indicate the presence of sellers. This could drive the market into the short-term 50% level at .7156, followed by the uptrending Gann angle at .7130 and the short-term Fibonacci level at .7123.
Overcoming and sustaining the rally over .7222 will signal the presence of buyers. If this move generates enough upside momentum, we could see a move into the next downtrending Gann angle at .7262.
Since the main trend is up, watch for buyers to show up on a test of .7156 to .7123. They are going to try to form a secondary higher bottom.
This article was originally posted on FX Empire
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