AUD/USD Forex Technical Analysis – Short-Squeeze Could Take Aussie to .6863 into Close

The short squeeze in the Australian Dollar is continuing late Friday with the currency touching its highest level since September 18. The move began to pick up steam on Thursday after official figures revealed a surprise drop in the unemployment rate. This news encouraged investors to reduce their short bets on a November rate cut from the Reserve Bank of Australia (RBA). However, gains could be limited because some of the major banks are still forecasting a rate cut for either November or December.

At 18:25 GMT, the AUD/USD is trading .6851, up 0.0025 or +0.37%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Thursday when buyers took out the previous main top at .6811. Holding above this level will indicate the rally is being fueled by more than just buy stops. A trade through .6724 will change the main trend to down.

The main range is .6895 to .6671. The AUD/USD is also trading on the strong side of its retracement zone at .6809 to .6783, which is making this area new support.

Daily Technical Forecast

Given the current upside momentum, the next upside target into the close is .6863. The AUD/USD could pause at this price, but also accelerate into .6879. This is the last potential resistance angle before the .6895 main top.

On the downside, the minor support is a downtrending Gann angle at .6830. The main support is a steep uptrending Gann angle at .6804. This angle, moving up at a rate of .0004 per session from the .6724 main bottom has been guiding the Forex pair higher since October 16.