The Australian Dollar is inching higher on Friday, putting it in a position to challenge a main top from December 13. The Forex pair has been grinding higher for several days, producing numerous higher-lows in the process which indicates buyers are presence.
Today’s rally is being helped along by better-than-expected Australian retail sales. The report showed that retail sales rose 0.4% in December, slightly higher than the 0.3% estimate. Throughout the week, the currency has been underpinned by the news that the Peoples Bank of China had reduced reserve requirements for banks in an effort to stimulate the economy.
At 0753 GMT, the AUD/USD is trading .7212, up 0.0026 or +0.37%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a trade through .7247.
The minor trend is up. This move triggered the shift in momentum to up.
The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is new support. Trading on the strong side of this zone is helping to generate the upside bias.
Daily Technical Forecast
Based on the early price action and the upside momentum, the first target is an uptrending Gann angle at .7244. Overtaking this angle will indicate the buying is getting stronger. This should lead to a test of the main top at .7247.
Overtaking .7247 will change the main trend to up with the next upside target the downtrending Gann angle at .7259. Look for sellers on the first test of this angle. It is also the trigger point for an acceleration to the upside with the next target angle coming in at .7327.
After inching higher for most of the session, turning lower today would signal the return of sellers. The nearest downside target is the major Fibonacci level at .7153.
This article was originally posted on FX Empire
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