AUD/USD Forex Weekly Technical Analysis – Needs to Sustain Rally Over .7642
Based on last week’s close at .7714 and the price action, the direction of the AUD/USD this week is likely to be determined by trader reaction to the main 50% level at .7642
The Australian Dollar posted a solid gain last week against the U.S. Dollar despite rising U.S. Treasury yields and the passage of the largest U.S. tax overhaul in 30 years.
The AUD/USD settled the week at .7714, up 0.0075 or +0.98%.
In other news, the Reserve Bank of Australia minutes from its December policy meeting showed that the central bank has become more confident about the economic outlook in recent months, but weakness in consumer spending remains a “significant risk” amid slow income growth and high debt levels.
In the U.S., the dollar weakened after Final GDP came in at 3.2%, below the 3.3% estimate. Core Durable Goods Orders were -0.1%, well-below the 0.5% forecast and the upwardly revised 0.9% from last month
The main trend is down according to the weekly swing chart. The AUD/USD is far from turning its main trend to up, but there is room to the upside to rally.
The main range is .7159 to .8124. The Forex pair straddled its retracement zone at .7642 to .7528 for five weeks before closing on the strong side of this area last week. This zone is now support.
The new short-term range is .8124 to .7501. If the upside momentum on the weekly chart continues then we could see a possible extension of the rally into its retracement zone at .7813 to .7886