AUD/USD Forex Technical Analysis – Bullish Over .7642, Bearish Under .7527
The AUD/USD closed lower on Friday as investors took profits ahead of the week-end. The lower close ended a three-day rally that was fueled by short-covering following a potentially bullish closing price reversal bottom earlier in the week.
The catalyst behind the rally were dovish Fed minutes which strongly suggested the central bank may limit the number of rate hikes in 2018 and upbeat remarks about the economy from a key Reserve Bank of Australia central banker.
Technical factors also played a role in the last week’s rally with buyers coming in following a test of a major long-term Fibonacci level.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. A trade through .7729 will change the main trend to up. This is followed by the next main top at .7897.
A trade through .7532 will negate the closing price reversal bottom and signal a resumption of the downtrend. This could drive the AUD/USD into the next main bottom at .7372.
The main range is .7159 to .8124. Its retracement zone is .7642 to .7527. This zone is controlling the longer-term direction of the AUD/USD.
Daily Swing Chart Forecast
Based on Friday’s close at .7612 and last week’s price action, the direction of the AUD/USD today will be determined by trader reaction to the major 50% level at .7642.
A sustained move over .7642 will signal the presence of buyers. If this move creates enough upside momentum then look for the Forex pair to challenge the main top at .7729.
A sustained move under .7642 will indicate the presence of sellers. This could trigger a break into last week’s low at .7532 and the major Fibonacci level at .7527.
Look out to the downside if .7527 is taken out with conviction. This is a potential trigger point for a steep sell-off.
This article was originally posted on FX Empire