AUD/USD Forex Technical Analysis – Formed Potentially Bullish Closing Price Reversal Bottom on Tuesday

The Australian Dollar is trading higher late in the session on Tuesday after recovering from an earlier loss. The currency is in a position to post a potentially bullish closing price reversal bottom. If confirmed, we could see the start of a 2 to 3 day counter-trend trade.

The Aussie benefited from a dip in the U.S. Dollar, which eased off its 1-month low against the greenback as U.S. Treasury yields stabilized, allowing room for the riskier currency to move higher.

At 21:49 GMT, the AUD/USD is trading .7721, up 0.0075 or -0.98%.

The U.S. 10-year Treasury bond yields eased to 1.52% after hovering near 13-month highs of 1.613% in the prior session on expectations of a faster-than-expected economic rebound and possible inflation, as President Joe Biden’s $1.9 trillion coronavirus aid package moved forward.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a move through .8007. This is highly unlikely but if a closing price reversal bottom is formed and confirmed on Wednesday then look for the start of a minimum 2 to 3 day counter-trend rally. A move through .7621 will signal a resumption of the downtrend.

The main range is .7564 to .8007. Its retracement zone is controlling the near-term direction of the AUD/USD. This area is also the first upside target and potential resistance.

The new minor range is .8007 to .7621. Its retracement zone at .7814 to .7860 is another potential upside target.

Short-Term Outlook

Taking out .7726 on Wednesday will confirm the closing price reversal bottom. This could trigger the start of a 2 to 3 day counter-trend rally.

A sustained move over the Fibonacci level at .7733 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the 50% level at .7786 the next likely target.

The inability to sustain a move over .7733 will indicate the buying isn’t that strong. This would mean the AUD/USD needs to spend some time trying to build a support base.