Yahoo Finance AUD/USD Forex Technical Analysis – Trend Down, Momentum May Have Shifted to Downside
The AUD/USD closed lower on Friday, posting a minor closing price reversal top. This move indicates the selling may be greater than the buying at current price levels.
Several catalysts influenced the price action including a broad recovery in the U.S. Dollar, mixed Australian jobs data and a dovish speech from the Reserve Bank of Australia (RBA) Governor earlier on Friday.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. After a five-day short-covering rally, momentum shifted back to the downside with the formation of the minor closing price reversal top.
A trade through .7988 will shift momentum back up. The downtrend resumes by a trade through .7758.
The main range is .8135 to .7758. Its retracement zone at .7947 to .7991 stopped the rally on Friday at .7988. The close below this zone is giving the AUD/USD a downside bias.
The short-term range is .7758 to .7988. If the downside momentum continues then its retracement zone at .7873 to .7846 will become the primary downside target.
The major retracement zone that stopped the selling at .7758 is .7818 to .7743.
Daily Swing Chart Forecast
The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7891.
A trade through .7891 will confirm Friday’s closing price reversal top and signal the presence of sellers. This could drive the Forex pair into the short-term 50% level at .7873. This is followed by the short-term Fibonacci level at .7846 and the major 50% level at .7818.
The AUD/USD will open up to the downside under .7818.
The inability to confirm the reversal top, or sustain the move will indicate the presence of buyers. This could fuel a retracement of Friday’s sell-off with the first potential target coming in at .7947. Overcoming this level will indicate the buying is getting stronger.
This article was originally posted on FX Empire
