The Australian Dollar finished higher last week despite an extremely volatile trade. The currency traded better early in the week in reaction to a weaker U.S. Dollar, but was crushed mid-week with the release of hawkish U.S. Federal Reserve meeting minutes and political turmoil in Australia.
The Aussie firmed enough on Friday to recapture its earlier loss, led by the lifting of political uncertainty following the ousting of Prime Minister Malcolm Turner and the appointment of Scott Morrison as the new leader. The Aussie also received a boost after the greenback weakened in response to dovish comments from Fed Chair Jerome Powell, who hinted that the central bank was getting close to normalization.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For the week, the AUD/USD closed at .7327, up 0.0010 or +0.13%.” data-reactid=”13″>For the week, the AUD/USD closed at .7327, up 0.0010 or +0.13%.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. However, momentum has been trending higher since the closing price reversal bottom at .7202 the week-ending August 17 and the subsequent confirmation the last week.
The main trend will change to up on a trade through .7484. A move through .7202 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The minor trend is also down. A trade through .7453 will change the minor trend to up and confirm the shift in momentum.
The short-term range is .7484 to .7202. Its retracement zone at .7343 to .7376 is resistance. It’s controlling the short-term direction of the Forex pair.
The main range is .7677 to .7202. If the upside momentum continues then its retracement zone at .7439 to .7496 is the next upside target.
Weekly Technical Forecast
Based on last week’s close at .7327 and last week’s price action, the direction of the AUD/USD this week is likely to be determined by trader reaction to the potential resistance cluster at .7343 to .7344.
A sustained move under .7443 will indicate the presence of sellers. The daily chart is wide open to the downside with the next targets a potential support cluster at .7204 to .7202, followed by a downtrending Gann angle at .7197.
Crossing to the weak side of the angle at .7197 will put the AUD/USD in an extremely weak position with .7159 the next likely downside target.
A sustained move over .7344 will signal the presence of buyers. This could trigger a rally into .7376. Taking out this level could fuel a rally into a resistance cluster at .7432, .7437 and .7439.
Crossing to the strong side of .7439 will put the AUD/USD in a bullish position with minor top targets at .7453 and .7465, and main targets at .7484 and .7496.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”37″>This article was originally posted on FX Empire
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