The June Australian Dollar continued its follow-through to the upside, approaching a key 50 percent price level but not quite touching it before selling off early in the trading session. Based on the main range created by 1.0720 to 1.0314, a key retracement zone has been created at 1.0517 to 1.0565. Last night’s rally reached 1.0511. It is still possible that this zone will be reached, but based on the size of the sell-off, it seems a little remote. On the downside, the nearest support is an uptrending Gann angle at 1.0434 today. Additionally, the short-term range is 1.0314 to 1.0413. This creates a potential retracement zone at 1.0413 to 1.0389. Since the main trend is down, I was only expecting a 2 to 3 day retracement equal to at least 50 percent of the last break. The market almost reached this first objective in the allotted time period, but a resistance cluster later this week suggests the market may have more upside potential. On March 22, a downtrending Gann angle drops in at 1.0560. In addition, an uptrending Gann angle is at 1.0554. Finally, both angles are near a 61.8 percent or Fibonacci retracement level at 1.0565. If the June Australian Dollar makes one more run at the upside, then this resistance cluster is likely to the next upside target. Although the main trend is down, bullish traders will attempt to form a secondary higher bottom. The first attempt to make this bottom should be on the Gann angle at 1.0434. If this fails, then look for an acceleration down to 1.0413 to 1.0389 over the near-term. Fundamentally, the June Australian Dollar followed-through to the upside after Friday’s surge. Weak U.S. economic data helped fuel demand for higher risk currencies. This week absence of major economic reports could put greater emphasis on technical analysis and chart patterns.

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