AUD/USD Forex Technical Analysis – Ripe for Reversal but Chart Shows Way of Least Resistance is Still Down

The Australian Dollar remains under pressure on Wednesday after a batch of upbeat U.S. economic data lifted its U.S. counterpart, while domestic news disappointed bulls. The Aussie fell to its lowest level since October 6, pressured by strong U.S. retail and industrial figures. The currency was further pressured by a report that showed Australian wages data failed to beat expectations as some in the market had been betting on.

At 09:59 GMT, the AUD/USD is trading .7280, down 0.0021 or -0.28%.

Annual wage growth ticked up to a moderate 2.2% just as forecast, while bulls had hoped a higher outcome would reinforce the case for an early rate hike from the Reserve Bank of Australia (RBA).

The news encouraged futures traders to lengthen the odds on a hike just a little, with a move to 0.25% now fully priced in by July next year rather than June. Yet swaps still have rates approaching 1% by the end of the year.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at .7263 will signal a resumption of the downtrend. A move through .7431 will change the main trend to up.

The minor trend is also down. A trade through .7371 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is .7170 to .7556. The AUD/USD is currently trading on the weak side of its retracement zone at .7318 to .7363, making it resistance.

The minor range is .7556 to .7263. If the minor trend changes to up then its 50% level at .7410 will become the next upside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7310.

Bearish Scenario

A sustained move under .7310 will indicate the presence of sellers. If this continues to weigh on the Aussie then look for a retest of .7263. Taking out this level could trigger an acceleration to the downside with the minor bottom at .7226 the next likely target.

Bullish Scenario

A sustained move over .7310 will signal the presence of buyers. The next target is .7318.

Sellers could come in on the first test .7318. Overtaking it, however, could trigger a surge into .7363, followed closely by .7371. Once again look for sellers.

Overcoming .7371 will shift momentum to the upside. This could trigger a further rally into .7410.