AUD/USD Buyers Targeting .7262 – .7331 Retracement Zone

The Australian Dollar is trading slightly better on Wednesday as global markets steadied in the wake of Russia’s latest moves in Ukraine. The Aussie is showing little reaction to the sharp rise in the New Zealand Dollar after the Reserve Bank (RBNZ) hiked interest rates 25 basis points to 1.0% as expected.

At 04:51 GMT, the AUD/USD is trading .7226, up 0.0008 or +0.11%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $71.57, up $0.43 or +0.60%.

Perhaps putting a lid on the AUD/USD is domestic data that showed annual wage growth only edged up to 2.3% in the December quarter, when bulls had hoped for 2.4% or more.

Currently, futures traders are looking for a Reserve Bank of Australia (RBA) rate hike as early as June.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7249 will reaffirm the uptrend. A move through .7086 will change the main trend to down.

The short-term range is .7314 to .6967. The AUD/USD is currently trading on the bullish side of its retracement zone at .7181 to .7140, making it support.

The main range is .7556 to .6967. Its retracement zone at .7262 to .7331 is the primary upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD into the close on Wednesday is likely to be determined by trader reaction to .7218.

Bullish Scenario

A sustained move over .7218 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the main top at .7249, followed by the main 50% level at .7262.

Overtaking .7262 will indicate the buying is getting stronger. This could trigger a further rally into the next main top at .7277.

Bearish Scenario

A sustained move under .7218 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the short-term Fibonacci level at .7181.