AUD/USD Forex Technical Analysis – Overcoming .7379 with Conviction Could Trigger Steep Upside Breakout

The Australian Dollar is trading flat against the U.S. Dollar early Tuesday after hitting its highest level since September 14 the previous session. The Aussie is being underpinned by higher commodity prices and the easing of restrictions in the country’s most-populated state New South Wales.

At 04:28 GMT, the AUD/USD is trading .7346, down 0.0001 or -0.02%.

Higher oil and iron ore prices are helping to drive the Australian Dollar higher against the U.S. Dollar, but some traders don’t expect the rally to last much longer with the U.S. Treasury yields rising ahead of the Federal Reserve’s November 2-3 policy meeting where central bank policymakers are expected to announce the start of tapering of massive amounts of stimulus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7373 will signal a resumption of the uptrend. A move through .7226 will change the main trend to down.

On the upside, the long-term resistance is the retracement zone at .7379 to .7499.

On the downside, support is a series of retracement zone at .7324, .7299, .7271 and .7247.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7347.

Bullish Scenario

A sustained move over .7347 will indicate the presence of buyers. If this move generates enough upside momentum then look for a surge into .7373 to .7379.

Taking out .7379 will indicate the buying is getting stronger with .7410 the next target. This is a potential trigger point for an acceleration to the upside with .7478 to .7503 the next likely target area.

Bearish Scenario

A sustained move under .7347 will signal the presence of sellers. The first downside target is the 50% level at .7324. If this fails then look for another break into .7299. This is the last potential support before the primary downside target zone at .7271 to .7247.