AUD/USD Forex Technical Analysis – Downside Momentum Targeting .7363 – .7317

The Australian Dollar closed lower on Thursday after reversing earlier gains. The Aussie started the session strong after the Federal Reserve repeated it saw high inflation as transitory and elected to begin tapering its massive stimulus while refraining from announcing a rate hike timetable. The news was considered less-hawkish, driving the U.S. Dollar lower.

On Thursday, the AUD/USD settled at .7400, down 0.0049 or -0.66%.

Gradually, however, U.S. Dollar investors took a more balanced view of the Fed monetary policy update and the overall picture painted by fresh upbeat data for the U.S. services industry.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7383 will signal a resumption of the downtrend. A move through .7556 will change the main trend to up.

The minor trend is also down. A trade through .7471 will change the minor trend to up and shift momentum to the upside.

The nearest support is a long-term Fibonacci level at .7379. This is followed by a short-term retracement zone at .7363 to .7317. Aggressive counter-trend buyers could come in on a test of this area.

On the upside, potential resistance is layered at .7440, .7470 and the long-term 50% level at .7499.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD early Friday is likely to be determined by trader reaction to .7379.

Bearish Scenario

A sustained move under .7379 will indicate the presence of sellers. This could trigger a quick break into the short-term 50% level at .7363. If this fails then look for the selling to possibly extend into the short-term Fibonacci level at .7317.

Look for counter-trend buyers on a test of .7363 to .7317. If .7317 fails, however, then look for a potential acceleration to the downside with the next targets a pair of main bottoms at .7226 and .7170.

Bullish Scenario

A sustained move over .7379 will signal the presence of buyers. This could trigger a retest of .7440. Overcoming this level could fuel a rally into the resistance cluster at .7470 to .7471. Since the main trend is down, sellers could come in on a test of this area.