AUD/USD Forex Technical Analysis – Short-Term Rangebound: Strengthens Over .7078, Weakens Under .7016
The Australian Dollar finished slightly higher on Monday, but volume and volatility were well-below average as the major players remained on the sidelines ahead of the New Year holiday. The Aussie held up well despite China’s official manufacturing purchasing managers’ index (PMI), released Monday showed one of its key economic pillars falling back into contraction for the first time in two years.
The AUD/USD settled at .7052, up 0.0013 or +0.19%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .7016 will signal a resumption of the downtrend. A trade through .7247 will change the main trend to up. Due to the prolonged move down in terms of price and time, the AUD/USD may be ripe for a potentially bullish closing price reversal bottom.
The minor trend is also down. A trade through .7078 will change the minor trend to up. This will also shift momentum to the upside.
The short-term range is .7247 to .7016. Its short-term retracement zone at .7132 to .7159 is the primary upside target.
The main range is .7394 to .7016. Its retracement zone at .7205 to .7250 is the next target zone.
Daily Swing Chart Technical Forecast
Based on the recent price action, the direction of the AUD/USD over the near-term is likely to be determined by trader reaction to .7078 to .7016.
Bullish Scenario
A sustained move over .7078 will signal the return of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at .7132 to .7159. Since the main trend is down, sellers may show up on a test of this zone.
Bearish Scenario
A sustained move under .7016 will indicate the presence of sellers. If this move is able to attract enough sellers, we could see a break into the February 9, 2016 main bottom at .6973.
This article was originally posted on FX Empire
