AUD/USD Forex Technical Analysis – Late Session Reversal Could Lead to Early Test of .7397 – .7422 RT Zone
The Australian Dollar is trading higher late in the session on Wednesday after a dovish remark from Federal Chairman Jerome Powell triggered a wicked intraday reversal to the upside.
The Aussie was under pressure shortly after the Fed released its monetary policy statement at 18:00 GMT that said policymakers believed the economy was making progress toward its goals. Traders initially read this statement as hawkish.
However, in his press conference, Powell cautioned there was a ways to go before the central bank would adjust its easy policies. This dovish remark pushed Treasury yields and the U.S. Dollar lower, trigger a strong intraday reversal to the upside by the Aussie Dollar.
At 20:03 GMT, the AUD/USD is trading .7374, up 0.0016 or +0.27%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however momentum is trending higher. A trade through .7397 will change the main trend to up. A move through .7290 will signal a resumption of the downtrend.
The minor range is .7290 to .7397. The AUD/USD is currently in a position to close on the strong side of its pivot at .7343, making it support.
The short-term range is .7503 to .7290. If the main trend changes to up then look for the rally to possibly extend into its retracement zone at .7397 to .7422.
Additional resistance is the long-term Fibonacci level at .7379.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD early Thursday is likely to be determined by trader reaction to .7379.
A sustained move over .7379 will indicate the presence of buyers. This could create the upside momentum needed to take out the resistance cluster at .7397. Taking out this level will change the main trend to up with .7422 the next likely target.
The Fibonacci level at .7422 is the potential trigger point for an acceleration to the upside with the next major target zone coming in at .7499 to .7503.
A sustained move under .7379 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the pivot at .7343, followed by .7317. Taking out .7317 will signal the return of sellers. This could extend the selling into .7290.