AUD/USD Forex Technical Analysis – Holding .7230 Pivot Could Create Enough Upside Momentum to Challenge .7277

The Australian Dollar is inching higher early Wednesday after rebounding the previous session following a second successful test of a key support area at .7184. But it’s going to take a slew of good news and a weaker U.S. Dollar to create enough momentum to overcome stiff resistance around .7276.

At 09:25 GMT, the AUD/USD is trading .7242, up 0.0002 or +0.03%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $71.83, up $0.53 or +0.74%.

In economic news, ANZ data showed a 5.5% fall in job advertisements in December which could reflect some caution by employers given the spread of the Omicron coronavirus variant and its impact on the service sector. Additionally, the huge jump in coronavirus cases locally risked curbing consumer spending and adding to the case for keeping monetary stimulus in place.

Nonetheless, financial futures traders have almost fully priced a rate rise from the Reserve Bank of Australia (RBA) by June, even though the central bank has repeatedly said a move was highly unlikely this year. This is probably helping to keep the Aussie afloat early in the year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through .7277 will reaffirm the uptrend and change the momentum. A move through .7083 will change the change the main trend to down.

The minor trend is down. This is controlling the momentum. A move through .7184 will indicate the selling pressure is getting stronger.

The main range is .7556 to .6993. Its retracement zone at .7275 to .7341 is the primary upside target. It’s also controlling the near-term direction of the Forex pair.

The minor range is .7277 to .7184. The AUD/USD is currently trading on the strong side of its pivot at .7230, making it potential support.

Additional support levels are lined up at .7212, .7182 and .7135. The latter is a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7230.

Bullish Scenario

A sustained move over .7231 will indicate the presence of buyers. If this move creates enough upside momentum then look for a run into the resistance cluster at .7275 – .7277.

If the buying is strong enough then look for an acceleration over .7277 with .7341 the next major target.

Bearish Scenario

A sustained move under .7230 will signal the presence of sellers. This could lead to a labored break with potential support levels lined up at .7212, .7182 and .7135. Since the main trend is up, buyers could come in on a test of any of these levels. However, the best downside target and value price is the short-term 50% level at .7135.