AUD/USD Forex Technical Analysis – Could Be Set Up for Another Acceleration into .7586 Main Bottom

The Australian Dollar is trading nearly flat early Friday following a steep plunge the previous session. The selling pressure was fueled by stronger-than-expected U.S. jobs data that suggested an improving labor market, reinforcing signs that the world’s largest economy was on its way to a steady path to recovery from the pandemic.

At 06:43 GMT, the AUD/USD is trading .7666, up 0.0005 or +0.07%.

U.S. private payrolls increased by 978,000 jobs in May, the ADP National Employment Report showed, the biggest increase since June 2020. Economists polled by Reuters had forecast private payrolls would increase by 650,000 jobs.

At the same time, U.S. initial jobless claims dropped below 400,000 last week for the first time since the COVID-19 pandemic started more than a year ago.

Later today at 12:30 GMT, Aussie Dollar traders will get the chance to react to the U.S. Non-Farm Payrolls report for May, which could set the tone at the Federal Reserve’s mid-June policy meeting. Wall Street economists’ consensus forecast was for 650,000 new U.S. jobs last month.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Thursday when sellers took out the previous main bottom at .7677. A trade through .7774 will change the main trend to up.

The short-term range is .7532 to .7891. The AUD/USD is currently trading on the weak side of its retracement zone at .7669 to .7712, making this area potential resistance.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is the resistance controlling the short-term direction of the AUD/USD.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .7669.

Bearish Scenario

A sustained move under .7669 will indicate the presence of sellers. The daily chart indicates there is plenty of room to the downside with the next major downside target the April 13 main bottom at .7586. Increased selling volume could trigger an acceleration to the downside.

Bullish Scenario

A sustained move over .7670 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the short-term 50% level at .7712. Since the main trend is down, sellers could come in on a test of this level.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.