AUD/USD Forex Technical Analysis – Weekly Chart Bullish Over .8007, Bearish Under .7965

The Australian Dollar finished lower against its U.S. counterpart last week while posting an inside move. The chart pattern suggests investor indecision and impending volatility. Bullish investors believe the fundamentals are strong enough to support a rally. Bearish investors believe the Aussie Dollar is overvalued and getting ready to head lower.

The AUD/USD settled last week at .8000, down 0.0054 or -0.67%.

Bullish investors cite strong commodity prices as one reason for higher prices. Iron ore prices are sitting at high levels, coal prices have also rallied and the demand for these key exports indicates global growth is improving.

A weaker U.S. Dollar has also helped boost the Australian Dollar, however, this wasn’t the case last week as a jump in U.S. Treasury yields drove the Greenback higher.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. The inside move, lower close indicates aggressive counter-trend sellers were in charge.  A trade through .8124 will signal a resumption of the uptrend with a main top at .8162 the next target, followed closely by the major 50% level at .8165.

The main trend will change to down on a move through .7807.

The short-term range is .7807 to .8124. Its retracement zone at .7965 to .7928 provided support last week. Crossing to the weak side of this zone will shift momentum to the downside.

The main range is .7329 to .8124. Its retracement zone at .7726 to .7633 is the primary downside target.

Weekly Forecast

Based on last week’s close at .8000 and price action, the direction of the AUD/USD this week is likely to be determined by trader reaction to the short-term 50% level at .7965.

A sustained move over .7965 will signal the presence of buyers. Overcoming the short-term uptrending angle at .8007 will indicate the buying is getting stronger. This could create enough upside momentum to challenge the long-term uptrending angle at .8089.

Overcoming the angle at .8089 will put the Aussie in a position to challenge the high at .8124, followed by the main top at .8162 and the major 50% level at .8165.

A sustained move under .7965 will indicate the presence of sellers. The first target is the Fibonacci level at .7928. If this fails then we could see a break into a pair of uptrending angles at .7907 and .7857. The latter is the last potential support angle before the .7807 main bottom.

Basically, look for a bullish tone to develop on a sustained move over .8007 and a bearish tone to develop on a sustained move under .7965.