Last week, the Australian Dollar finished slightly lower. The market posted a volatile two-sided trade with concerns over a potential rate cut as early as August weighing on prices and a series of dovish Federal Reserve decisions providing support. One of the biggest factors affecting the trade was the plunge in U.S. Treasury yields. The steep drop was so severe that the yield curve inverted with the benchmark 10-year U.S. Treasury yield dropping below the 3-month Treasury bill yield.
This week’s price action is likely to be determined by the direction of U.S. Treasury yields and investor appetite for risk. Last week, the AUD/USD settled at .7081, down 0.0006 or -0.08%.
Weekly Swing Chart Analysis
The main trend is down according to the weekly swing chart. A trade through .7296 will change the main trend to up.
The minor trend is also down. A move through .7207 will change the minor trend to up. This will also shift momentum to the upside. A move through .7003 will signal a resumption of the downtrend.
The main range is .7394 to .6764. Its retracement zone at .7079 to .7153 is currently being tested. This zone is controlling the near-term direction of the AUD/USD.
The short-term range is .6764 to .7296. Its retracement zone at .7003 to .6967 is support. This zone stopped the selling the week-ending March 8 at .7003.
Weekly Swing Chart Technical Forecast
Based on last week’s close at .7081, the direction of the AUD/USD this week is likely to be determined by trader reaction to the 50% level at .7079 and the downtrending Gann angle at .7074.
A sustained move over .7079 will indicate the presence of buyers. If this move creates enough upside momentum then look for a drive into the Fibonacci level at .7153. This is a potential trigger point for an acceleration into the next downtrending Gann angle at .7234.
A sustained move under .7074 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the short-term 50% level at .7030, followed closely by the uptrending Gann angle at .7004. Taking out the minor bottom at .7003 could drive the AUD/USD into the short-term Fibonacci level at .6967.