AUD/USD Forex Technical Analysis – Looking for Technical Bounce on First Test of .7579 to .7523

The Australian Dollar is trading lower on Thursday after falling to its lowest level against the U.S. Dollar since December 29 earlier in the session. The Aussie is also trading lower for the year as souring risk sentiment in global markets boosted the greenback.

Traders are saying falling stocks on Wall Street on Wednesday, in Asia overnight, and at the open in Europe contributed to a shift in sentiment.

Also on Wednesday, the Federal Reserve left its benchmark overnight interest rate near zero and pledged to continue injecting money into the economy through bond purchases, noting that “the pace of the recovery in economic activity and employment has moderated in recent months.”

At 10:56 GMT, the AUD/USD is trading .7619, down 0.0044 or -0.57%.

Later today at 13:30 GMT, the Commerce Department’s snapshot of fourth-quarter gross domestic product is expected to show the recovery from the pandemic losing steam as the year wound down mid a resurgence in coronavirus infections and exhaustion of nearly $3 trillion in relief money from the government.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Wednesday when sellers took out the previous main bottom at .7669 and the January 4 main bottom at .7643. A trade through .7764 will change the main trend to up.

The short-term range is .7339 to .7820. The price action suggests the AUD/USD is headed into its retracement zone at .7579 to .7523. We could see a technical bounce on the first test of this zone.

Daily Swing Chart Technical Forecast

The trend is down and downside momentum became stronger overnight. This likely means we’re going to see a test of .7579 to .7523. Inside this zone is a minor bottom at .7557.

We expect to see come counter-trend buyers come in on a test of this area, but are not too concerned over a strong rally developing unless the buying is strong enough to overtake yesterday’s close at .7663, producing a closing price reversal bottom.

We’re not likely to see major bottom form until the AUD/USD hits a value area. At first glance, that area is .7405 to .7308.

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.