AUD/USD Forex Technical Analysis – Near-Term Bearish Under .7318 – .7363 Retracement Zone
The Australian Dollar is edging lower late Wednesday as the U.S. Dollar continued to strengthen on the prospect that the Federal Reserve will begin hiking rates in mid-2022. Additionally, Fed officials have contributed to the more hawkish view on U.S. interest rates as the central bank faces stubbornly high inflation.
At 20:18 GMT, the AUD/USD is trading .7195, down 0.0032 or -0.44%.
San Francisco Fed President Mary Daily said on Wednesday that she could see a case being made to speed up the Fed’s tapering of its bond purchases. Fed Vice Chair Richard Clarida said last week that it may be appropriate to discuss speeding up the pace of its taper at the Fed’s December 14-15 meeting.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the intraday low at .7184 will signal a resumption of the downtrend into the close and early Thursday.
A move through .7431 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, the AUD/USD is inside the window of time for a closing price reversal bottom. This won’t change the main trend to up, but if confirmed, it could trigger the start of a 2 to 3 day counter-trend rally.
The minor range is .7371 to .7228. Its 50% level or pivot at .7278 is the nearest upside target and potential resistance level.
The main resistance is the retracement zone at .7318 to .7363. This area is controlling the near-term direction of the AUD/USD.
Daily Swing Chart Technical Forecast
Wednesday’s downside momentum suggests traders may take a run at the September 29 main bottom at .7170. Taking out this level will reaffirm the downtrend. If the volume is strong enough then look for the selling pressure to possibly extend into the August 20 main bottom at .7106.
Although the AUD/USD may be ripe for a closing price reversal bottom and a subsequent short-covering rally, don’t expect to see a strong recovery rally unless buyers can overcome the short-term 50% level at .7363. This is not only resistance but also a trigger point for an acceleration to the upside.