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AUD/USD Forex Technical Analysis – Has to Hold .7818 to Sustain Short-Covering Rally

James Hyerczyk

The AUD/USD bounced back on Monday, driven by massive gains in global stock markets. Although the U.S. 10-year Treasury Note traded over 2.9% for the first time in four years, U.S. Treasury yields did not dictate the direction of the currency this week. Instead, the price action was driven by renewed optimism towards stocks.

Daily April Comex Gold

 Daily Technical Analysis

The main trend is down according to the daily swing chart. Monday’s price action made .7758 a new minor bottom. A trade through .7758 will signal a resumption of the downtrend.

The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. Trader reaction to this zone is likely to dictate the direction of the Aussie over the near-term.

The short-term range is .8135 to .7758. If the upside momentum continues then its retracement zone at .7947 to 7991 will become the primary upside target.

Daily Technical Forecast

Based on the price action on Monday, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to the main 50% level at .7818.

A sustained move over .7818 will indicate the presence of buyers. This move could create the upside momentum needed to challenge the downtrending Gann angle at .7915. Since the main trend is down, we could see a technical bounce on the first test of this angle. Overcoming it will indicate the momentum is getting stronger with .7947 the next likely target.

A break back under .7818 will signal the return of sellers. This could drive the AUD/USD back into Friday’s low at .7758 and the main Fibonacci level at .7743.

This article was originally posted on FX Empire