AUD/USD Forex Technical Analysis – Needs Stronger Volume to Trigger Breakout Over .7774

The Australian Dollar is trading higher against the U.S. Dollar late in the session on Thursday as a drop in U.S. Treasury yields made the greenback a less-attractive investment. Although U.S. consumer prices jumped more than expected in May, the surge in inflation looks to be temporary and should not push the Federal Reserve to tighten policy for now.

At 18:55 GMT, the AUD/USD is trading .7755, up 0.0023 or +0.30%.

On Thursday, the U.S. government reported the consumer price index rose 5% in May on a year-over-year basis, the highest since the summer of 2008, when oil prices were skyrocketing. Excluding food and energy, core CPI rose 3.8% year over year, the highest pace since 1992.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7774 will change the main trend to up. A move through .7646 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .7766 will change the minor trend to up and shift momentum to the upside. A new minor bottom has formed at .7718.

The short-term range is .7532 to .7891. Its retracement zone at .7711 to .7669 is support.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance.

Both areas have been holding the AUD/USD in a range for nearly two months.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD into the close on Thursday is likely to be determined by trader reaction to the main 50% level at .7770.

Bullish Scenario

A sustained move over .7770 will indicate the presence of buyers. Taking out the main top at .7774 will change the main trend to up and could drive the market into the next main top at .7796. Taking out this level will reaffirm the uptrend with .7814 the next target.

Bearish Scenario

A sustained move under .7769 will signal the presence of sellers. If this move creates enough upside momentum then look for the selling pressure to possibly extend into the short-term retracement zone at .7711 to .7769.

Side Notes

The AUD/USD appears to be forming an upside bias, but traders could continue to hold it in a range until after the Federal Reserve makes its policy announcements on June 16.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.