AUD/USD Forex Technical Analysis – Retracement Zone at .7397 to .7422 Next Major Hurdle to Overcome

This post was originally published on this site

The Australian Dollar is trading higher but off its highs late in the session on Thursday. The early session rally was fueled as a global risk sell-off abated further. This week’s rebound rally in the higher-risk currency came about after U.S. Treasury yields rose and robust company earnings lifted Wall Street and European stocks, allowing investors to look past concerns that the Delta COVID-19 variant would dampen the economic recovery.

At 18:23 GMT, the AUD/USD is trading .7381, up 0.0022 or +0.30%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has shifted to the upside. A trade through .7290 will signal a resumption of the downtrend. The main trend will change to up on a trade through .7503.

The minor range is .7290 to .7397. Its 50% level or pivot at .7343 is support.

The short-term range is .7503 to .7290. Its retracement zone at .7397 to .7422 is the primary upside target. The lower or 50% level of this range stopped the buying on Thursday.

The major retracement zone is .7379 to .7499. This zone is controlling the longer-term direction of the Forex pair.

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 long-term Fib level at .7379.

Bullish Scenario

A sustained move over .7379 will indicate the presence of buyers. This could trigger a quick rally into the short-term retracement zone at .7397 to .7422.

Since the main trend is down, sellers could come in on a test of .7397 to .7422. However, taking out .7422 could trigger an acceleration to the upside with the next target a resistance cluster at .7499 to .7503.

Bearish Scenario

A sustained move under .7379 will signal the presence of sellers. This could create the downside momentum needed to retest the pivot at .7343. If this price fails as support then look for the selling to possibly trigger an acceleration into .7290.