AUD/USD Forex Technical Analysis – Holding .7722 Puts Aussie in Bullish Position

The Australian Dollar is edging higher on Thursday, slightly below its two-week top touched the previous session. Volume is on the light side because of Lunar New Year holidays in Japan and China.

The Aussie posted a potentially bearish closing price reversal top on Wednesday after sellers came in as the currency approached the last main top at .7764.

At 06:16 GMT, the AUD/USD is trading .7745, up 0.0024 or +0.31%.

Helping to pressure the Aussie was a volatile U.S. stock market session. Wall Street’s main indexes turned negative in volatile trading on Wednesday after the S&P 500 and the Dow hit record highs at the open on hopes of faster economic growth.

In other news, Reserve Bank of Australia board member Ian Harper said Australia’s unemployment is too high and the economy has too much lost activity for monetary stimulus to be fueling excessive stock and property valuations.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. A trade through .7764 will change the main trend to up, but the buying is going to have to be strong enough to take out main tops at .7782 and .7805 in order to reach the multi-year high at .7820.

The minor trend is up. This is controlling the upside momentum. Today’s lower-low has helped form a minor top at .7756.

The intermediate range is .7820 to .7564. The AUD/USD is currently trading on the strong side of its retracement zone at .7722 to .7692. This zone is new support.

The short-term range is .7564 to .7756. Its retracement zone at .7660 to .7637 is a potential downside target and support area.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the AUD/USD is likely to be determined by trader reaction to the intermediate Fibonacci level at .7722.

Bullish Scenario

A sustained move over .7722 will indicate the presence of buyers. If this move creates enough upside momentum then look for buyers to challenge the minor top at .7756, followed by the main top at .7764.

Taking out .7764 will change the main trend to up. This could trigger a further rally into the next main top at .7782.

Bearish Scenario

A sustained move under .7722 will signal the presence of sellers. This could trigger a quick break into the intermediate 50% level at .7692.

If .7692 fails then look for the selling to extend into .7660 to .7637.