AUD/USD Forex Technical Analysis – Reaction to .7096 to .7020 Determines Near-Term Direction
The Australian Dollar is trading nearly flat late Friday as a steep break in U.S. equity markets is capping demand for higher risk currencies. Many of the major players are also on the sidelines ahead of next Tuesday’s U.S. Presidential election and a major monetary policy decision by the Reserve Bank of Australia (RBA).
At 16:46 GMT, the AUD/USD is trading .7030, up 0.0003 or +0.04%.
Traders expect the RBA to trim its benchmark interest rate from 0.25% to 0.10% and to announce the start of a major bond-buying program that should keep the pressure on interest rates until the economy stabilizes.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .7002 will signal a resumption of the downtrend. The next major target is the June 15 main bottom at .6777. The main trend will change to up on a move through the last main top at .7158.
The minor trend is also down. The nearest minor trend bottoms include .6963 and .6921.
The main range is .6777 to .7414. The AUD/USD is currently straddling its retracement zone at .7096 to .7020. This zone is controlling the longer-term direction of the Forex pair.
Short-Term Outlook
The price action the last two days suggests the direction of the AUD/USD into the close will be determined by the Fibonacci level at .7020.
Bullish Scenario
A sustained move over .7020 will indicate the presence of buyers. This could trigger a quick rally into .7080, followed by .7096.
Bearish Scenario
A sustained move under .7020 will signal the presence of sellers. This is followed by .7002. Taking out this level could trigger a break into the July 16 bottom at .6963.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
