AUD/USD Forex Technical Analysis – Strengthens Over .7224, Weakens Under .7200

The Australian Dollar is trading slightly better on Friday, rebounding from earlier weakness. The initial move after the lower opening drove the currency into .7202 where the selling dried up slightly above a 50% level at .7200.

At 0558 GMT, the AUD/USD is trading .7222, up 0.0016 or +0.24%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend turned down on Thursday when sellers took out the previous main bottom at .7236. A move through .7314 will change the main trend to up.

The main range is .7363 to .7085. Its retracement zone is .7224 to .7257. Holding below this zone will help maintain the current downside bias. The retracement zone levels should be considered resistance.

The short-term range is .7085 to .7314. Its retracement zone at .7200 to .7173 is a potential support area.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the short-term 50% level at .7200.

A sustained move over .7200 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to extend into the main 50% level at .7224.

Since the main trend is down, sellers could come in on a test of .7224. Overcoming it, however, could trigger an acceleration to the upside with .7257 the next likely upside target. Sellers could come in at this level for the same reason. It is also a potential trigger point for an acceleration to the upside.

The inability to overcome .7224 will signal the return of sellers. The first downside target is .7200. Taking out this level could trigger a hard break into the minor Fib at .7173.

The Fibonacci level at .7173 is a potential trigger point for an acceleration to the downside with .7142 the next likely target. Taking out this main bottom could fuel another acceleration to the downside.