AUD/USD Forex Technical Analysis – Main Trend Down; Sustained Move Under .7700 Targets .7621

The Australian Dollar is trading lower on Tuesday as continued weakness in the crude oil market weighed on demand for commodity-linked currencies. The Aussie is being pressured despite a second straight day of lower Treasury yields.

Traders could also be preparing for a volatile session ahead of Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen’s first joint appearance before the U.S. House Committee on Financial Services. The discussion will center on the oversight of the Treasury’s and Federal Reserve’s pandemic response.

In prepared remarks published ahead of the hearing, Powell noted that the recovery is gaining steam, before adding there’s still a long way to go.

At 08:00 GMT, the AUD/USD is trading .7689, down 0.0055 or -0.71%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on a trade through .7700. A move through .7849 will change the main trend to up.

The main range is .7564 to .8007. The AUD/USD is currently trading on the weak side of its retracement zone at .7733 to .7786. This zone is new resistance.

The short-term range is .8007 to .7621. Its retracement zone at .7814 to .7860 is potential resistance.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the AUD/USD will be determined by trader reaction to .7733.

Bearish Scenario

A sustained move under .7733 will indicate the presence of sellers. If this continues to generate enough downside momentum then look for the selling to possibly extend into the March 9 main bottom at .7621. This is followed by the February 2 bottom at .7564.

Bullish Scenario

A sustained move over .7733 will signal the presence of buyers. This could lead to a labored rally with potential resistance levels coming in at .7786, .7814 and .7860.

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