AUD/USD Forex Technical Analysis – Strengthens Over .7099, Weakens Under .7047

The Australian Dollar closed nearly flat in a lackluster trade on Tuesday. Helping to put a cap on the currency was a drop in demand for riskier assets. Underpinning the Aussie were lower U.S. Treasury yields that pressured the U.S. Dollar.

On Tuesday, the AUD/USD settled at .7108, down 0.0001 or -0.01%. The Invesco CurrencyShares Australian Dollar Trust ETF (FXA) finished at $70.34, down $0.01 or -0.01%.

The risk sensitive Australian Dollar lost ground as shares slid worldwide on Tuesday as supply chain woes and surging costs hurt corporate earnings and manufacturing output slowed, while Treasury yields dipped as the weakness in equities revived a safe-haven bid for U.S. government debt.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .7266 will change the main trend to up. A move through .6829 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through .6950 will change the minor trend to down.

The short-term range is .7266 to .6929. The market is currently trading on the strong side of its retracement zone at .7099 to .7047, making it support.

The intermediate range is .7458 to .6829. Its retracement zone at .7144 to .7218 is the next target area.

The main range is .7661 to .6829. Its retracement zone at .7245 to .7343 is the primary target area of this rally.

The minor range is .6829 to .7127. Its trailing pivot at .6978 is potential support.

Daily Swing Chart Technical Forecast

Trader reaction to .7099 will likely determine the direction of the AUD/USD early Wednesday.

Bullish Scenario

A sustained move over .7099 will indicate the presence of buyers. This could trigger a quick move into .7127, followed by the intermediate 50% level at .7144. Sellers could come in on the first test of this level, but overcoming it could trigger an acceleration into .7218.

Bearish Scenario

A sustained move under .7099 will signal the presence of sellers. This could trigger a quick break into the short-term 50% level at .7047.

Taking out .7047 will indicate the selling pressure is getting stronger. This could trigger an acceleration into the trailing pivot at .6978.