The Australian Dollar finished slightly lower last week, but the strong finish at the end of the week suggests upside momentum may be building. The trade last week can best be described as volatile and two-sided.
The AUD/USD settled at .7418, down 0.0006 or -0.09%.
The price action was primarily driven by the movement in the U.S. Dollar. The Greenback was pushed higher by hawkish testimony before Congress by U.S. Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday then driven lower on Thursday and Friday when President Trump criticized the Fed for raising interest rates.
In between, the Aussie caught a short-lived bid after the Employment Change beat expectations. The number was strong, but not strong enough to convince the Reserve Bank of Australia to raise interest rates earlier than expected.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. However, momentum has been trying to shift to the upside since the formation of the closing price reversal bottom at .7310 the week-ending July 6.
A trade through .7310 will negate the chart pattern and signal a resumption of the downtrend. This could lead to an eventual break into the December 23, 2016 main bottom at .7159.
The minor trend is also down. A trade through .7484 will change the minor trend to up. This will also shift momentum to the upside.
The short-term range is .7677 to .7310. If the minor trend changes to up then look for a rally into its retracement zone at .7494 to .7537.
The main range is .7812 to .7310. Its retracement zone at .7561 to .7620 is another upside target.
Weekly Technical Forecast
Based on last week’s close at .7418, the direction of the AUD/USD this week will be determined by trader reaction to a pair of Gann angles at .7397 and .7430.
A sustained move under .7397 will indicate the presence of sellers. This could drive the Forex pair into a pair of uptrending Gann angles at .7370 and .7340. The latter is the last potential support angle before the .7310 main bottom.
Taking out .7310 will signal a resumption of the downtrend. This could drive the AUD/USD into a downtrending Gann angle at .7252. Crossing to the weak side of this angle will put the Forex pair in a bearish position.
A sustained move over .7430 will signal the presence of buyers. This could trigger an acceleration into .7484, followed by .7494.
Overtaking .7494 will indicate the buying is getting stronger with the next target a resistance cluster at .7532 to .7537.
This article was originally posted on FX Empire
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