AUD/USD Forex Technical Analysis – Testing Retracement Zone; Weakens Under .7350, Strengthens Over .7379
The Australian Dollar is trading lower for a fourth straight session early Thursday as investors continue to react the Reserve Bank of Australia’s (RBA) decision to stick to plans to taper its bond buying while extending the length of the program as the economy struggles with coronavirus lockdowns.
Initially, the Aussie firmed because the RBA tapered, but went down because the RBA will buy at a rate of 4 billion a week for longer. Essentially, the central bank is still injecting quite a lot of stimulus into the system.
At 04:55 GMT, the AUD/USD is trading .7351, down 0.0017 or -0.22%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7222 will change the main trend to down. A move through .7478 will signal a resumption of the uptrend.
The AUD/USD is currently trading on the weak side of a longer-term retracement zone at .7379 to .7499, making it resistance.
The minor range is .7222 to .7478. Its retracement zone at .7350 to .7320 is currently being tested. Since the main trend is up, buyers could come in to support this zone.
The short-term range is .7106 to .7478. Its retracement zone at .7292 to .7248 is the primary downside target and value zone.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to .7350.
A sustained move over .7350 will indicate the presence of buyer. The first upside target is .7379. Overtaking this level could trigger a surge into a pivot at .7412.
A sustained move under .7350 will signal the presence of sellers. This could lead to a continuation of the labored sell-off with potential resistance level targets lined up at .7320, .7292 and .7248.
The Fibonacci level at .7248 is the last potential support level before the .7222 main bottom.