AUD/USD Forex Technical Analysis – Testing Pair of 50% Levels at .7413 – .7397, Needs to Clear .7443 to Change Trend

The Australian Dollar is trading higher early Thursday, boosted by better-than-expected domestic employment change data. Although the data may be showing the economy is on the right track, low wages and inflation will likely mean the Reserve Bank of Australia will remain dovish with some investors saying interest rates will remain at historical lows until late 2019 or early 2020.

At 0600 GMT, the AUD/USD is trading .7411, up 0.0014 or +0.19%.

Today’s early session strength was essentially fueled by a surge in Australian 2-year note yields. This forced short-sellers to adjust their positions in reaction to the move.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend will change to up on a trade through .7443. Today’s intraday rally stopped at .7442, just short of this main top.

On Wednesday, the AUD/USD reaffirmed the downtrend when sellers took out the previous main bottom at .7360. However, the late session reversal indicates the move may have been fueled by sell stops rather than aggressive new shorting. A trade through .7342 will negate the reversal bottom and signal a resumption of the downtrend.

The short-term range is .7484 to .7342. Its 50% level or pivot is .7413.

The intermediate range is .7310 to .7484. Its retracement zone is .7397 to .7376. Aggressive counter-trend buyers may try to establish support inside this zone.

The main range is .7677 to .7310. If the trend changes to up then it may create enough upside momentum to challenge its retracement zone at .7494 to .7537.

Daily Swing Chart Technical Forecast

Based on the early price and the current price at .7411, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the short-term pivot at .7413.

A sustained move under .7413 will indicate the presence of sellers. This could lead to an early labored break with initial targets at .7397 and .7376. If the latter fails as support then look for a possible retest of yesterday’s minor bottom at .7342. This is a potential trigger point for a further decline into the main bottom at .7310.

A sustained move over .7413 will signal the presence of buyers. If this move can generate enough upside momentum, buyers may take a run at the main top at .7443.

The trend will change to up on a trade through .7443. This could fuel an acceleration to the upside with targets coming in at .7484 and .7494.