AUD/USD Forex Technical Analysis – Struggling to Recover from Early Weakness Amid Hawkish Powell Comments

The Australian Dollar is under pressure late Friday. The risk sensitive Aussie fell early in the session after a broad sell-off in Asian stock markets, but recovered a little later in the day when U.S. equity markets rebounded from mid-session weakness. A stronger U.S. Dollar was also capping gains.

At 19:12 GMT, the AUD/USD is trading .6935, down 0.0112 or -1.59%. The Invesco CurrencyShares Australian Dollar Trust ETF (FXA) is at $68.69, down $1.16 or -1.66%.

Fed Chair Powell’s threat of aggressive rate hikes to fight soaring inflation gave the U.S. Dollar a boost. Although the Reserve Bank of Australia (RBA) is expected to raise rates aggressively over the next several months, it not likely to keep up with the Fed. Furthermore, the U.S. economy remains on more stable ground than the Australian economy.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6851 will signal a resumption of the downtrend. A more through .7283 will change the main trend to up.

The minor trend is also down. A trade through .7069 will change the minor trend to up. This will shift momentum to the upside.

The minor range is .6851 to .7069. The AUD/USD close on the weak side of its pivot at .6960, making it resistance.

The short-term range is .7283 to .6851. Its 50% level at .7067 is also resistance.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at .69600 is likely to determine the direction of the AUD/USD into the close on Friday.

Bearish Scenario

A sustained move under .6960 will indicate the presence of sellers. If this move creates enough downside momentum then look for a possible surge into the main bottom at .6851.

Bullish Scenario

A sustained move over .6960 will signal the presence of buyers. If this generates enough upside momentum then look for a late session surge into the resistance cluster at .7067 – .7069.