AUD/USD Forex Technical Analysis

Based on Thursday’s chart pattern and the close at .6509, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to Thursday’s low at

0.6490.



The Australian Dollar closed lower against the U.S. Dollar on Thursday, ending a six-session winning streak. The Aussie was pressured by a drop in demand for risky assets as global equity markets fell in response to disappointing news regarding stimulus measures from the European Central Bank and disappointing U.S. weekly unemployment claims.


On Thursday, the AUD/USD settled at .6509, down 0.0045 or -0.68%.

Traders also said the selling was fueled by portfolio adjustments and end of the month profit-taking ahead of a long holiday weekend for many parts of the world.


Chart Technical Analysis


The main trend is up according to the daily swing chart. However, Thursday’s closing price reversal top is the first sign of a shift in momentum to the downside. A trade through .6490 will confirm the chart pattern. This won’t change the trend to down, but it could trigger a 2 to 3 day correction or at least 50% of the last rally from .6254.

A trade through .6570 will negate the closing price reversal top, while a move through .6254 will change the main trend to down.


The minor range is .6254 to .6570. Its 50% level at .6412 is the first downside target. The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is support. This zone is controlling the near-term direction of the AUD/USD.


Daily Swing Chart Technical Forecast

Based on Thursday’s chart pattern and the close at .6509, the direction of the AUD/USD on Friday is likely to be determined by trader reaction to Thursday’s low at .6490.

Bearish Scenario

A sustained move under .6490 will confirm the closing price reversal top at .6570. If this creates enough downside momentum then look for the selling to possibly extend into the 50% level at .6412.

Since the main trend is up, buyers could come in on a test of .6412. If this level fails then look for a possible acceleration to the downside with the near-term target .6236.

Bullish Scenario

A sustained move over .6490 will indicate the selling pressure is weak. If this generates enough upside momentum then look for a possible retest of .6570. Taking out this level will negate the closing price reversal top. This could trigger an acceleration to the upside with the March 9 top at .6685 the next likely upside target.



Good Trading,

Dom

Dominik Stone

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