AUD/USD Forex Technical Analysis Sustained Move Over .7965 Could Fuel Intraday Rally into .8005 to .8028

The AUD/USD is trading higher on Friday. The market is recovering from early session weakness that drove the Forex pair into its lowest level since August 31. The catalyst behind the intraday turnaround was flight to safety buying, fueled by a threat by North Korea to detonate a nuclear bomb in the Pacific Ocean.

Early in the session, the U.S. Dollar was trading higher against the Australian Dollar on the back of Wednesday's Federal Open Market Committee meeting.

Technically, the main trend is down according to the daily swing chart.

A trade through the intraday low at .7908 will signal a resumption of the downtrend. This could trigger a further break into a pair of bottoms at .7871 to .7866.

The major retracement zone and further support area is .7847 to .7782.

The intermediate range is .7807 to .8124. Its retracement zone is .7965 to .7928. The market is straddling this zone today. Trader reaction to this zone will determine the near-term direction of the AUD/USD. Currently, it is trading on the strong side of this zone, giving the Forex pair an upside bias.

The new short-term range is .8102 to .7908. If the rally continues then look for a test of its retracement zone at .8005 to .8028.

Look for today's bullish tone to continue into the close today if buyers can sustain the rally over .7965. If the upside momentum continues then look for the rally to possibly extend into .8005, .8022 and .8028.

A sustained move under .7965 will signal the return of sellers. This could trigger an acceleration into the next potential support levels at .7928 and .7908.

Friday's rally is being fueled by short-covering in reaction to a news event. If the story begins to die down then sellers could return later in the session.

The direction of the AUD/USD into the close will be determined by whether investors want to carry protection against an escalation of the tensions between North Korea and the United States over the week-end.

This article was originally posted on FX Empire