AUD/USD Forex Technical Analysis – Struggling Inside Retracement Zone at .7292 to .7248
The Australian Dollar is trading lower on Tuesday after giving up earlier gains amid rising bond yields which are making the U.S. Dollar a more attractive investment.
U.S. Treasury yields have been soaring since last Wednesday hawkish shift at the Federal Reserve. Last week, policymakers announced it may start tapering stimulus as soon as November and flagged interest rate increases may follow sooner than expected.
At 07:26 GMT, the AUD/USD is trading .7268, down 0.0018 or -0.25%.
Meanwhile, the Reserve Bank of Australia (RBA) has stated that it is not likely to raise its benchmark rate until 2024, which is about the time it sees actual inflation within the 2 to 3 percent target range.
In other news, the lower trade by the Aussie suggests that traders are shrugging off the better-than-expected Australian Retail Sales data that came in at minus 1.7%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .7220 will signal a resumption of the downtrend. The main trend will change to up on a trade through .7478. This is highly unlikely, but there is room for a normal retracement of the recent sell-off.
The minor trend is also down. The minor trend will change to up on a trade through .7347. This will shift momentum to the upside.
The short-term range is .7106 to .7478. The AUD/USD is currently trading inside its retracement zone at .7292 to .7248. Trader reaction to this area could determine the near-term direction of the Forex pair.
Another short-term range has been identified as .7478 to .7220. Its retracement zone at .7349 to .7379 is resistance.
Additional resistance is the longer-term retracement zone at .7379 to .7499.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the 50% level at .7292.
A sustained move under .7292 will indicate the presence of sellers. The first downside target is the Fibonacci level at .7248. If this fails then look for a test of the main bottom at .7220.
Taking out .7220 will reaffirm the downtrend. If this move creates enough downside momentum then look for the selling pressure to possibly extend into the August 20 main bottom at .7106.
A sustained move over .7292 will signal the presence of buyers. Taking out .7347 will indicate the buying is getting stronger. This could trigger an acceleration into the retracement zone at .7349 to .7379. Since the main trend is down, look for sellers on the first test of this area.