AUD/USD Forex Technical Analysis – Could Find Intraday Strength Over .7237, Weakness Under .7221

The Australian Dollar is trading lower on Wednesday as rising Treasury yields drive investors into the U.S. Dollar. The greenback is getting support as investors brace for the Federal Reserve to begin tapering asset purchases this year and lay the ground for an exit from pandemic-era interest rate settings well before the Reserve Bank of Australia (RBA).

At 11:10 GMT, the AUD/USD is at .7241, down 0.0049 or -0.68%.

U.S. Non-Farm Payrolls data due on Friday is seen as crucial to setting the Federal Reserve’s tone and timing of the start of tapering and its first interest rate hike in years, especially should the figures wildly impress or disappoint.

On Wednesday, traders will have the opportunity to react to the latest ADP Non-Farm Employment Change report at 12:15 GMT. It is expected to show the private sector of the economy added 425,000 jobs.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7304 will change the main trend to up. A move through the nearest swing bottom at .7170 will reaffirm the downtrend.

The minor range is .7170 to .7304. The Aussie is currently testing its retracement zone at .7237 to .7221. Counter-trend buyers could come in on a test of this area. They are going to try to form a secondary higher bottom.

On the upside, the first resistance is a 50% level at .7324, followed by a Fibonacci level at .7379.

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 .7237 and .7221.

Bullish Scenario

Holding above .7237 will indicate the presence of buyers. If this creates enough upside momentum then look for a drive into .7265. Overcoming this level will indicate the buying is getting stronger with .7304 the next target, followed by .7316 and .7324.

Bearish Scenario

A sustained move under .7221 will signal the presence of sellers. The daily chart indicates there is plenty of room under this level until the next support so don’t be surprised by an acceleration to the downside. The next target is the .7170 main bottom.