The Australian Dollar finished lower on Friday, but inside the previous session’s range. This move suggests investor indecision and impending volatility. Last week’s price action also indicates the three week rally may be losing steam. The break on Friday was likely fueled by a rise in U.S. Treasury yields.
The news on Thursday and Friday was responsible for the volatility at the end of the week. Reports that the U.S. and China are willing to offer concessions in order to bring an end to the trade conflict were the catalysts between the sideways to lower trade.
On Friday, the AUD/USD settled at .7165, down 0.0028 or -0.39%. For the week, the Forex pair was down 0.0051 or -0.70%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The momentum created by the six-day rally has also shifted to down. A trade through .7236 will change the main trend to up.
The minor trend is also down. A trade through .7146 will indicate the selling is getting stronger. A trade through .7226 will change the minor trend to up. This will also shift momentum to the upside.
The main range is .7394 to .6764. Its retracement zone at .7153 to .7079 is controlling the near-term direction of the AUD/USD. Holding above this zone will help generate an upside bias. It should also be considered support.
The new short-term range is .6764 to .7236. If the selling pressure continues then its retracement zone at .7000 to .6944 will become the primary downside target.
Daily Swing Chart Technical Forecast
Based on last week’s price action and Friday’s close at .7165, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at .7153.
A sustained move over .7153 will indicate the presence of buyers. This could lead to a labored rally with a series of minor resistance levels at .7222, .7226 and .7236.
Taking out .7236 will change the main trend to up. This should lead to a quick move into the next main top at .7247. This price is the trigger point for an acceleration to the upside with the next major target the main top at .7394.
Taking out .7153 will put the AUD/USD in a weak position, while a trade through .7146 is likely to trigger an acceleration to the downside with the first target a 50% level at .7079.
We could see a technical bounce on the first test of .7079, but if it fails then look for another acceleration into the minor 50% level at .7000.