AUD/USD Forex Technical Analysis – Weakens Under .7350, Strengthens Over .7379

The Australian Dollar is under pressure for a third session on Wednesday after a wave of global risk aversion and a surge in U.S. Treasury yields boosted its U.S. counterpart.

Traders are still responding to Tuesday’s decision by the Reserve Bank of Australia (RBA) to stick with plans to trim its bond buying to A$4 billion a week, but also extend that out to February as a nod to coronavirus uncertainties.

At 08:52 GMT, the AUD/USD is trading .7362, down 0.0026 or -0.35%.

While the RBA Board conceded that the economic recovery from current Delta lockdowns would likely be drawn out, it also predicted a very strong pick up over all of 2022.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7478 will signal a resumption of the uptrend. A move through .7222 will change the main trend to down.

Early Wednesday, the AUD/USD is trading on the weak side of a long-term retracement zone at .7379 to .7499, making it resistance. This zone stopped the rally on September 3 at .7478.

The minor range is .7222 to .7478. Its retracement zone at .7350 to .7320 is the first downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

The short-term range is .7106 to .7478. Its retracement zone at .7292 to .7248 is the primary downside target and the last potential support before the .7222 main bottom.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7379.

Bearish Scenario

A sustained move under .7379 will indicate the presence of sellers. The first downside target is .7350, followed by .7320.

If .7320 fails then look for the selling to possibly extend into .7292 to .7248 over the near-term.

Since the main trend is up, the selling is likely to be labored with possible support at a number of retracement levels from .7350 to .7248.

Bullish Scenario

A sustained move over .7379 will signal the presence of buyers. If this move creates enough upside momentum then look for the move to possibly extend into a minor pivot at .7414. Counter-trend sellers could come in on a test of this level. Taking it out could drive the AUD/USD into .7478.

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.