AUD/USD Forex Technical Analysis – Strengthens Over .7212, Weakens Under .7182

The Australian Dollar gained some ground against the U.S. Dollar on Friday after U.S. consumer prices increased roughly in line with expectations in November as investors, who had been bracing for much higher inflation, bet that the actual number would not change the pace of interest rate hikes. The price action essentially mirrored a choppy trade in U.S. Treasury yields.

On Friday, the AUD/USD settled at .7172, up 0.0025 or +0.35%. The Invesco CurrencyShares Australian Dollar Trust (FXA) ETF closed at $71.13, up $0.16 or +0.23%.

The November consumer price index surged 6.8% year over year, the fastest rate since 1982, the Labor Department reported Friday. Economists surveyed by Dow Jones expected the index to climb 6.7% from the year prior, while some investors feared an even higher figure.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .6993 will signal a resumption of the downtrend. A move through .7431 will change the main trend to up.

The minor trend is up. This is controlling the momentum. The minor trend changed to up on Thursday when buyers took out .7173. A trade through .7187 will reaffirm the uptrend.

The first minor range is .7371 to .6993. Its 50% level at .7182 is currently being tested. The second minor range is .7431 to .6993. Its 50% level at .7212 is the next target level.

The short-term range is .7556 to .6993. If the upside momentum continues then look for a surge into its retracement zone at .7275 to .7341.

The new minor range is .6993 to .7187. Its 50% level at .7090 is the nearest support.

Short-Term Outlook

The direction of the AUD/USD early Monday is likely to be determined by trader reaction to .7182.

Bullish Scenario

A sustained move over .7182 will indicate the presence of buyers. Taking out .7187 will indicate the buying is getting stronger. This could trigger a quick move into .7212.

The 50% level at .7212 is a potential trigger point for an acceleration into .7275 to .7341.

Bearish Scenario

A sustained move under .7182 will signal the presence of sellers. This could trigger a sharp break into the pivot at .7090.