AUD/USD Forex Technical Analysis – Rising Yields Weighing on Aussie; Reaction to .7613 Sets the Tone

The Australian Dollar is flat against the U.S. Dollar on Tuesday after giving back earlier gains. The selling pressure is being fueled by a surge in U.S. Treasury yields. The catalysts behind the latest plunge in U.S. Treasuries are expectations for a swift and strong U.S. economic recovery.

At 08:33 GMT, the AUD/USD is trading .7630, down 0.0001 or -0.01%.

Traders are being influenced by the news on Monday that those aged 30 and older would now be eligible for coronavirus vaccinations and expectations that President Joe Biden’s infrastructure initiative, with a potential $3 trillion price tag, could further lift economic growth and debt issuance.

U.S. 10-year Treasury yields rose to 14-month highs, dragging Australian bond yields with them.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on March 25.

A trade through .7563 will signal a resumption of the downtrend. The main trend changes to up on a move through .7849.

The minor range is .7563 to .7664. Its 50% level or pivot at .7613 is potential support.

The short-term range is .7849 to .7563. Its 50% level at .7706 is the next upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD is likely to be determined by trader reaction to the pivot at .7613.

Bullish Scenario

A sustained move over .7614 will indicate the presence of buyers. This could lead to a retest of the intraday high at .7664. Taking out this level will indicate the buying is getting stronger. This could lead to a test of the short-term pivot at .7706.

Bearish Scenario

A sustained move under .7613 will signal the presence of sellers. If this move creates enough downside momentum then look for a sharp break into .7563. This is a potential trigger point for an acceleration to the downside with the December 21, 2020 main bottom at .7462 the next likely downside target.

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