Australia Markets close in 4 hrs 3 mins

AUD/USD Forex Technical Analysis – May Have Completed 50% to 61.8% Correction

James Hyerczyk

Surging U.S. Treasury yields, a tumultuous stock market and dovish commentary from a high-ranking Reserve Bank of Australia official helped drive the Australian Dollar to a six-week low last week. The Forex pair is now sitting slightly above last year’s close after turning lower for the year earlier in the week.

For the week, the AUD/USD settled at .7809, down 0.0110 or -1.39%.

Daily AUD/USD

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. However, momentum has been trending lower since the week-ending January 26. The uptrend will be reaffirmed on a move through .8135. The trend will change to down on a trade through .7501.

The main range is .7501 to .8135. Its retracement zone at .7818 to .7743 is currently being tested. Trader reaction to this zone will determine the near-term direction of the market. Overcoming .7818 will fuel a short-covering rally while breaking through .7743 will lead to increased downside momentum.

Weekly Technical Forecast

Based on last week’s close at .7809, the direction of the AUD/USD this week will be determined by trader reaction to the 50% level at .7818.

A sustained move over .7818 will signal the presence of buyers. This could generate the upside momentum needed to challenge a potential resistance cluster at .7895 to .7901.

A sustained move under .7818 will indicate the presence of sellers. This could drive the AUD/USD into the Fibonacci level at .7743. This is a potential trigger point for an acceleration into the nearest uptrending Gann angle at .7701.

If U.S. Treasury yields ease or global equity markets stabilize then the AUD/USD could pop over .7818. Similar conditions to last week in these two markets could lead to further downside pressure.

This article was originally posted on FX Empire

More From FXEMPIRE: