The Australian Dollar settled higher last week while posting an inside move. The price action suggests investor indecision and impending volatility. The Reserve Bank of Australia left interest rates unchanged and economic data was mixed. Increased demand for risk may have helped the Aussie.
The AUD/USD closed the week at .7846, up 0.0085 or +1.09%.
The Forex pair weakened after the release of stronger-than-expected U.S. jobs data, but rallied late Friday when President Trump announced he would exempt Australia from tariffs on steel and aluminum.
Weekly Technical Analysis
The main trend is up according to the weekly chart, however, momentum has been trending lower since January 26. A trade through .7712 will signal a resumption of the downtrend.
The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. This zone is controlling the longer-term direction of the AUD/USD.
The short-term range is .8135 to .7712. Its retracement zone at .7924 to .7973 is the primary upside target. Since the main trend is down, we’re likely to see sellers show up on a test of this zone.
Weekly Technical Forecast
Based on Friday’s close at .7846, the direction of the AUD/USD this week is likely to be determined by trader reaction to the 50% level at .7818.
A sustained move over .7818 will indicate the presence of buyers. This could trigger a rally into the downtrending Gann angle at .7855. Watch for sellers on the first test of this angle.
Taking out .7855 will likely lead to a move into .7924 to .7973.
A sustained move under .7818 will signal the presence of sellers. This could drive the Aussie into an uptrending Gann angle at .7781, followed by the Fibonacci level at .7743.
If .7743 fails, the selling is likely to increase with .7712 being a trigger point for an acceleration to the downside.
This article was originally posted on FX Empire
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