AUD/USD Forex Technical Analysis – Counter-Trend Rally Through .7293 Shifts Momentum to Upside

The Australian Dollar is inching higher Friday on position-squaring ahead of the weekend. Despite the early gains, the currency remains in a position to close lower for a third consecutive week.

A batch of upbeat U.S. economic data helped push the greenback higher against its Aussie counterpart throughout the week. The Aussie was also pressured by a wage report that failed to impress bullish traders. But it did support the RBA’s dovish perspective on the cash rate outlook that there will be no interest rate hikes in 2022 or 2023.

At 08:03 GMT, the AUD/USD is trading .7283, up 0.0006 or +0.09%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum may be getting ready to shift to the upside with the formation of a closing price reversal bottom on Thursday.

A trade through .7293 will confirm the closing price reversal bottom. This won’t change the main trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally.

A move through .7431 will change the main trend to up. A trade through .7250 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through .7371 will change the minor trend to up. This will confirm the shift in momentum.

The main range is .7170 to .7556. The market is currently trading on the weak side of its retracement zone at .7318 to .7363, making it resistance. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .7556 to .7250. Its 50% level at .7403 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to .7293 and .7250.

Bullish Scenario

A sustained move over .7293 will indicate the presence of buyers. This could lead to a labored really with potential upside targets lined up at .7318, .7363 and .7371.

Bearish Scenario

A sustained move under .7250 will signal the presence of sellers. This could create the momentum needed to challenge the next target at .7226. Taking out this level will indicate the selling is getting stronger with .7170 the next likely target.