AUD/USD Forex Technical Analysis – Setting-Up Possible Closing Price Reversal Bottom
The AUD/USD is trading higher early Thursday after reversing earlier weakness. Prices fell on Wednesday and earlier today as investors reacted to souring investor risk sentiment, falling commodity prices, weak Australian wage growth and robust U.S. economic data. Traders also continued to react to the divergence between the monetary policies of the U.S. Federal Reserve and the Reserve Bank of Australia.
Immediately after the release of mixed employment data, the AUD/USD fell to its lowest level since June 26. However, the lack of follow-through to the downside encouraged short-sellers to take profits, triggering a strong short-covering rally.
The Employment Change was up 3.7K. Lower than the 17.8K estimate. The Unemployment Rate fell to 5.4%, below the 5.5% estimate and previous read.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, today’s early price action suggests oversold conditions may have led to a shift in momentum to the upside and the possibility of a potentially bullish closing price reversal bottom.
Early in the session, the AUD/USD broke through the July 5 bottom at .7571 before stopping at .7563. Taking out this price later in the day could drive the Forex pair into the June 14 bottom at .7532.
The short-term range is .7729 to .7763. If the reversal bottom forms and there is a follow-through to the upside, we could see a rally into its retracement zone at .7646 to .7666.
Daily Technical Forecast
On the downside, the support is today’s intraday low at .7563. This is followed by .7532.
The first upside target is a downtrending angle at .7629. Since the main trend is down, we could see a technical bounce on the first test of the angle.
Overtaking .7629 could trigger an acceleration into the 50% level at .7646
This article was originally posted on FX Empire
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