AUD/USD Forex Technical Analysis – Continues to Struggle with .7769 to .7826 Retracement Zone

The Australian Dollar is trading slightly better on Friday, led by strength in commodity prices with iron ore rallying more than 30% in the past month and copper at decade highs. The Aussie is so far up 0.4% for the week, on track for its fourth straight weekly gain. It jumped 2.4% in April alone.

At 05:20 GMT, the AUD/USD is trading .7778, up 0.0013 or +0.17%.

In economic news, Australian producer prices (PPI) came in at 0.4%, better than the 0.3% forecast, but lower than the previous month’s 0.5% reading. Private Sector Credit came in at 0.4%, beating both the forecast and previous read.

China Manufacturing PMI fell well short of the forecast and slightly below the previous read. China Non-Manufacturing PMI beat the forecast but was less than the previous month. Caixin Manufacturing beat both the forecast and previous read.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart but Thursday’s closing price reversal top may be an indication that momentum is getting ready to shift to the downside.

A trade through .7818 will signal a resumption of the uptrend. The main trend will change to down on a trade through .7691.

The minor trend is also up. A trade through .7725 will change the minor trend to down. This will shift momentum to the downside.

A trade through yesterday’s low at .7751 will confirm the closing price reversal top. This will also shift momentum to the downside.

The main range is .8007 to .7532. The AUD/USD is currently testing its retracement zone at .7769 to .7626. This zone is controlling the near-term direction.

The short-term range is .7532 to .7818. If the main trend changes to down then its retracement zone at .7675 to .7641 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to .7769.

Bullish Scenario

A sustained move over .7770 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at .7818, followed by .7826. This would put the Aussie in a position to challenge the main top at .7849.

Taking out .7849 will signal a resumption of the uptrend. This could trigger an acceleration to the upside with .8007 the next major target.

Bearish Scenario

A sustained move under .7769 will signal the presence of sellers. This could trigger a hard break with the minor bottom at .7725 the next target, followed by the main bottom at .7691 and the short-term retracement zone at .7675 to .7641.

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.