The AUD/USD rallied on Monday, which was driven by massive gains in global stock markets. Although the U.S. 10-year Treasury Note traded over 2.9% for the first time in four years, U.S. Treasury yields did not dictate the direction of the currency this week. Price action has been driven by renewed optimism towards global stocks.
Daily Technical Analysis
The current momentum and main trend is down according to technical indicators. Yesterday’s price action made .7758 a new minor bottom. Currently we are printing a bullish pull back and A break below .7758 will signal a continuation of the downtrend. The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. Trader psychology around this zone is likely to dictate the direction of the Aussie over the near-term. The short-term range is .8135 to .7758. If the upside momentum continues then its retracement zone at .7947 to 7991 will become the primary upside target.
Daily Technical Forecast
Based on the price action on Monday, the direction of the AUD/USD the rest of the week is likely to be determined by trader reaction to the main 50% level at .7818.
A sustained move over the 200 moving average and the .7818 level will indicate the bulls have decided to come back into action. Since the main trend is down, we could see a technical bounce on the first test of this level. Overcoming it will indicate the momentum is getting stronger with .7947 the next likely target. A break back under .7818 will signal the return of sellers. This could drive the AUD/USD back into Friday’s low at .7758 .