AUD/USD Forex Technical Analysis – In Position to Freefall into .7226, Followed by .7170

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The Australian Dollar slid to its lowest level since October 11 on Thursday after a surprisingly soft set of local jobs numbers added to the pain already delivered by a high reading on U.S. inflation.

At 05:04 GMT, the AUD/USD is trading .7304, down -0.0022 or -0.31%.

On Wednesday, the Aussie was pressured when startlingly strong U.S. inflation figures sent the U.S. Dollar and yields surging as markets priced in the risk of an earlier rate hike there. This weakness spread into today’s session.

However, driving the currency sharply lower was a bearish report that showed Australia’s jobs figures were far weaker than forecast with employment falling 46,300 when a rise of 50,000 was expected, and the jobless rate jumping to 5.2%. This news likely dampened any chances of a sooner-than-expected rate hike by the Reserve Bank of Australia (RBA).

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intra-session low at .7295 will signal a resumption of the downtrend. A move through .7431 will change the main trend to up.

The main range is .7170 to .7556. The AUD/USD is currently trading on the weak side of its retracement zone at .7318 to .7363, making it resistance.

Additional resistance is the long-term Fibonacci level at .7379. This is followed by a short-term 50% level at .7426.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to .7318.

Bearish Scenario

A sustained move under .7317 will indicate the presence of sellers. This could trigger an acceleration to the downside with the next targets a pair of main bottoms at .7226 and .7170.

Bullish Scenario

A sustained move over .7318 will signal the presence of buyers. If this creates enough upside momentum then look for a rally into .7363 to .7379. Since the main trend is down, look for sellers on the first test of this area.

Overtaking .7379 will indicate the selling pressure is getting weaker or the buying stronger. This could trigger a surge into the potential resistance cluster at .7426 to .7431.