AUD/USD Forex Technical Analysis – Strengthens Over .7154, Weakens Under .7108

The Australian Dollar is inching lower early Wednesday on lower overnight demand for riskier assets. The currency bounced back the previous session as stock markets rallied sharply with investors shrugging off worries Omicron will derail global growth even as the variant spreads wildly.

At 03:55 GMT, the AUD/USD is trading .7131, down 0.0022 or -0.30%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.99, up $0.47 or +0.67%.

A further easing in China boosted iron ore prices to two-month highs and benefited the commodity-exposed currencies. Domestic monetary policy also looked set to become less of a drag on the Aussie as markets wagered the Reserve Bank of Australia (RBA) would end its bond buying stimulus as early as February.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7083 will reaffirm the downtrend. A move through .7224 will change the main trend to up.

The short-term range is .6993 to .7224. The currency is currently trading on the strong side of its pivot at .7108, making it potential support.

On the upside, a pair of pivots at .7182 and .7212 is the nearest resistance levels. The key retracement zone controlling the near-term direction of the Aussie is .7275 to .7341.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7154.

Bearish Scenario

A sustained move under .7153 will indicate the presence of sellers. The first downside target is the short-term pivot at .7108, followed by the main bottom at .7083.

The main bottom is a potential trigger point for an acceleration to the downside. The next target is a support cluster at .6993 – .6991.

Bullish Scenario

A sustained move over .7155 will signal the presence of buyers. This could trigger the start of a labored rally with potential targets at .7182, .7212 and .7224.

A trade through .7224 will not only change the main trend to up, but it could trigger an acceleration into .7275 – 7341.