AUD/USD Forex Technical Analysis – Aussie Threatening to Break Through Short-Term Retracement Zone Support

The Australian Dollar is trading lower shortly after the release of a pair of weaker-than-expected domestic economic reports.

Private capital expenditure fell 2.5 percent over the second quarter, a far weaker outcome that the 0.6 percent expansion the market forecast. Over the year, capex has only edged up 0.4 percent in the Australian Bureau of Statistics seasonally adjusted series.

Another sharp decline in building approvals also points to future weakness in the residential construction sector. Building approvals fell by 5.2 percent over the month.

At 0350 GMT, the AUD/USD is trading .7285, down 0.0023 or -0.30%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7382 will change the main trend to up. A move through .7238 will signal a resumption of the downtrend with the next target the August 15 main bottom at .7202.

The main range is .7453 to .7202. Trading on the weak side of its retracement zone at .7328 to .7357 is helping to generate a downside bias. These level are new resistance.

The short-term range is .7238 to .7363. The AUD/USD is currently straddling its retracement zone at .7301 to .7286.

Daily Swing Chart Technical Forecast

Based on the early trade and the current price at .7286, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at .7286.

A sustained move under .7286 will signal that the selling pressure is getting stronger. If this move creates enough downside momentum then look for a potential acceleration to the downside with .7238 the next likely downside target.

Holding above .7286 will suggest the return of buyers. This could trigger a move into the short-term 50% level at .7301. This level is a potential trigger point for an acceleration into the main 50% level at .7328, followed by the Fib level at .7357 and the minor top at .7363.