AUD/USD Forex Technical Analysis – Needs to Hold .7722 Fibonacci Level to Fuel Rally into .7764

The Australian Dollar is trading higher on the back of improved market sentiment on Tuesday. Increased demand for riskier assets is also helping to drive the commodity-linked currency higher. The Aussie is testing its highest level since January 27 as a survey of business confidence pointed to an ongoing recovery for the Antipodean country.

At 10:00 GMT, the AUD/USD is trading .7732, up 0.0029 or +0.37%.

The catalyst behind the rally is the National Australia Bank’s (NAB) Index of Business Confidence that doubled to +10 points in January, even as conditions eased back from historic highs as coronavirus breakouts curbed activity in a few cities but were ultimately contained.

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. A move through .7564 will signal a resumption of the downtrend.

The minor trend is up. It changed to up when buyers took out the minor top at .7704. This move shifted momentum to the upside.

The main retracement zone support is .7579 to .7523.

The minor range is .7564 to .7736. Its retracement zone at .7650 to .7630 is support.

The short-term range is .7820 to .7564. The AUD/USD is currently trading on the strong side of its retracement zone at .7722 to .7692.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the AUD/USD into the close will be determined by trader reaction to .7722.

Bullish Scenario

A sustained move over .7722 will indicate the presence of buyers. If this move creates enough upside momentum then look for the AUD/USD to challenge the next main top at .7746. Taking out this level will change the main trend to up.

Bearish Scenario

A sustained move under .7722 will signal the presence of sellers. This could trigger a break into the short-term 50% level at .7692. If this fails, the selling pressure could get stronger with the next target zone coming in at .7650 to .7630.

For a look at all of today’s economic events, check out our economic calendar.