AUD/USD Forex Technical Analysis – Taking Out .7774 will Change the Main Trend to Up

The Australian Dollar is edging lower early Monday after failing to follow-through following Friday’s strong reversal to the upside in reaction to the weaker-than-expected U.S. Non-Farm Payrolls report. Missing market expectations by nearly 90,000, seemed to cool worries that the U.S. recovery was running hot enough to require early tapering of policy support, dampening demand for the U.S. Dollar.

At 04:11 GMT, the AUD/USD is trading .7734, down 0.0010 or -0.13%.

In other news, the latest ANZ job ads report came in better than expected, suggesting the unemployment rate will move lower in coming months. Job ads increased by 7.9 percent in May – the 12th straight month of gains – to be 38.8 percent up on pre-pandemic levels.

The trade is a little subdued early in the week, a sign that investors may be already preparing for Thursday important consumer inflation report.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7646 will signal a resumption of the downtrend. A move through .7774 will change the main trend to up.

The short-term is .7532 to .7891. Its retracement zone at .7711 to .7669 is support and also a potential trigger point for an acceleration to the downside.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance and a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .7711.

Bullish Scenario

A sustained move over .7712 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .7770 to .7774. The latter is a potential trigger point for a further extension into a pair of main tops at .7796 and .7814, followed by the main Fibonacci level at .7826.

Bearish Scenario

A sustained move under .7712 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possible extend into the short-term Fibonacci level at .7669, followed by last week’s low at .7646.

Side Notes

If the AUD/USD is going to have any chance at eventually breaking out to the upside, the first thing that buyers will have to do is establish a support base on the strong side of the main 50% level at .7770. Otherwise, we’re just seeing a rally in a weak market.

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.