AUD/USD Forex Technical Analysis – February 7, 2019 Forecast
The Australian Dollar is trading slightly lower on Thursday after a steep sell-off the previous session. Wednesday’s break was fueled by dovish remarks from Reserve Bank of Australia Governor Philip Lowe that suggested the central bank may be preparing for an interest rate cut later this year. Some of today’s early pressure was provided by weaker-than-expected New Zealand employment data.
At 09:06 GMT, the AUD/USD is trading .7100, down 0.0007 or -0.10%.
The tight trading range and the slight recovery on Thursday suggests that yesterday’s sell-off may have been an over-reaction to Dr. Lowe’s comments so we could see some price adjusting. Nonetheless, sentiment has turned bearish so it’s just a matter of time before prices retreat into the high-to-mid .60’s.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .7076 will change the main trend to down. The uptrend will resume on a trade through .7296.
The minor trend is down. This move shifted momentum to the downside.
The AUD/USD is currently testing a key retracement zone at .7153 to .7079. This zone is controlling the near-term direction of the Forex pair.
Daily Technical Forecast
Based on the early price action and the lack of follow-through to the downside, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the main bottom at .7076.
Bullish Scenario
Holding above the 50% level at .7079 and the main bottom at .7076 will indicate the return of buyers. They will be attempting to defend the uptrend. If successful, this could create enough upside momentum to challenge the main Fibonacci level at .7153, followed by a downtrending Gann angle at .7196.
Bearish Scenario
Taking out .7076 will change the main trend to down. This could trigger an acceleration into the uptrending Gann angle at .7014.
Sentiment has shifted so we expect to see a change in trend to down over the near-term, however, since the sell-off was so fast this week, we may see a retracement to the upside which would give bearish traders the opportunity to short at better price levels.
Please let us know what you think in the comments below.
This article was originally posted on FX Empire
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