AUD/USD Forex Technical Analysis – Counter-Trend Bounce Following Test of .6791 to .6767 Retracement Zone

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James Hyerczyk

Fri, Sep 20, 2019, 1:31 AM

The Australian Dollar is trading higher on Friday. The price action suggests profit-taking and position-squaring ahead of the weekend since there were no major changes in the fundamentals overnight. After the release of bearish labor market data on Thursday, the chances of a Reserve Bank of Australia (RBA) rate cut on October 1, jumped from 42% to 75%. This is likely to keep the pressure on the Aussie, which means traders are likely to sell short-term rallies.

At 07:12 GMT, the AUD/USD is trading .6804, up 0.0011 or +0.16%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6895 will change the main trend to up. A move through .6688 will signal a resumption of the downtrend after a two-week counter-trend rally.

The minor trend is down. It changed to down when sellers took out .6848. This also means momentum is trending lower.

The main range is .7082 to .6677. Its retracement zone at .6880 to .6927 is the major resistance. This zone stopped the rally last week at .6895.

The short-term range is .6688 to .6895. Its retracement zone at .6791 to .6767 is currently being tested. The early price action suggests buyers came in at .6778, which was inside this zone.

Daily Technical Forecast

Based on the early price action and the current price at .6804, the direction of the AUD/USD the rest of the session on Friday is likely to be determined by trader reaction to the short-term 50% level at .6791.

Bullish Scenario

A sustained move over .6791 will indicate the presence of buyers. If this move generates enough upside momentum then look for a rally into an uptrending Gann angle at .6623.

Overcoming .6623 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next potential target a downtrending Gann angle at .6857.

Bearish Scenario

A sustained move under .6791 will signal the presence of sellers. This could trigger a break into the short-term Fibonacci level at .6767, followed by an uptrending Gann angle at .6656.

The Gann angle at .6656 is a potential trigger point for an acceleration to the downside with the next target angle coming in at .6672. This is the last potential support angle before the .6688 main bottom.

This article was originally posted on FX Empire