Yahoo Finance AUD/USD Forex Technical Analysis – Trend Down, but Inside Window of Time for Reversal Bottom
A combination of mixed-to-weaker Australian employment data and a dovish European Central Bank helped drive the Australian Dollar sharply lower on Thursday.
Early Thursday, the government the government reported that the Employment Change showed the economy added 12.0K jobs in May, well-below the 18.8K forecast. The previous month’s report was revised lower to 18.3K. The Unemployment Rate did dip to 5.4% from 5.6%. This was below the estimate.
The ECB said it would not begin raising rates until the summer of 2019. It also extended stimulus until December. Both moves were considered dovish, causing the Euro to plunge. This selling pressure spread to the Australian Dollar.
Furthermore, the hawkish U.S. Federal Reserve continued to exert downside pressure on the Aussie.
At 0248 GMT, the AUD/USD is trading .7462, down 0.0014 or -0.19%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The main trend turned down on Thursday when sellers took out the previous main bottom at .7476.
Today’s session begins with the AUD/USD down seven days from the last main top. This puts the Forex pair in the window of time for a potentially bullish closing price reversal bottom.
On the upside, the resistance is a Fibonacci level at .7513 and a 50% level at .7545.
Daily Swing Chart Technical Forecast
Based on the early price action of Friday, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to yesterday’s close at .7477.
A sustained move under .7477 will indicate the presence of sellers. If this generates enough downside momentum, we could see a test of main bottoms at .7448 and .7412.
The major downside targets are the June 2, 2017 main bottom at .7372 and the May 9, 2017 main bottom at .7329.
A sustained move over .7477 will signal the presence of buyers. This will put the AUD/USD in a position to form a closing price reversal bottom. Intra-day upside momentum could drive the Forex pair into .7513 and .7544.
This article was originally posted on FX Empire
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