AUD/USD Forex Technical Analysis – February 21
The AUD/USD finished higher on Monday in a lackluster trade. Volume was below average due to a U.S. bank holiday. Traders also seemed a little hesitant to take positions ahead of the release of the Reserve Bank of Australia’s monetary policy meeting minutes.
The main trend is up according to the daily swing chart. Momentum, however, shifted slightly to the downside with the formation of a potentially bearish closing price reversal top at .7732 on February 16 and its subsequent confirmation on Friday.
A trade through .7732 will negate the closing price reversal top and signal a resumption of the uptrend. The next major upside target is the November 8, 2016 top at .7777.
The main range is .7511 to .7732. If the short-term correction continues then its retracement zone at .7621 to .7595 will become the primary downside target
Based on Monday’s close at .7687, the direction of the market today is going to be determined by trader reaction to the uptrending angle at .7681 and the downtrending angle at .7672.
A sustained move over .7681 will signal the presence of buyers. This could generate the momentum needed to test a pair of downtrending angles at .7702 and .7717. The latter is the last potential resistance angle before the .7732 main top.
A sustained move under .7672 will indicate the presence of sellers. The daily chart is wide open to the downside so we could see the start of an acceleration to the downside with the next major target coming in at .7621.
Simply stated, look for an upside bias on a sustained move over .7681 and a downside bias on a sustained move under .7672.