AUD/USD Forex Technical Analysis – Trading Under Retracement Zone; Weakens Under .7733, Strengthens Over .7786

The Australian Dollar is trading lower early Friday but off its intraday low as traders await the release of the U.S. Non-Farm Payrolls report, due to be released at 13:30 GMT.

The U.S. Dollar strengthened and demand for higher risk assets fell on Thursday after Federal Reserve Chair Jerome Powell did not express concern about a recent sell-off in bonds while sticking to his stance to keep interest rates low for a long time.

At 07:26 GMT, the AUD/USD is trading .7704, down 0.0016 or -0.21%.

All eyes will be on the February jobs report. Economists expect to see that 210,000 payrolls were added in February, compared to just 49,000 in January, according to Dow Jones.

Good news for the U.S. economy could be bad news for the Australian Dollar. A Better-than-expected headline number could drive Treasury yields higher, which would also support the U.S. Dollar while weighing on demand for higher-risk currencies.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier today when sellers took out last week’s low at .7692. A trade through today’s intraday low at .7688 will signal a resumption of the downtrend.

The short-term range is .7564 to .8007. The AUD/USD is currently trading on the weak side of its retracement zone at .7733 to .7786, making this area resistance.

The new minor range is .8007 to .7688. Its retracement zone at .7848 to .7885 is a potential upside target and resistance area. This zone will move down as the Aussie moves lower.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to Thursday’s close at .7721.

Bearish Scenario

A sustained move under .7721 will signal the presence of sellers. The first target is the intraday low at .7688. Taking out this level with strong selling volume could trigger an acceleration to the downside with the February 2 main bottom at .7564 the primary downside target.

Bullish Scenario

A sustained move over .7721 will indicate the presence of buyers. The first target is the Fibonacci level at .7733. Overcoming this level will indicate the buying is getting stronger. This could trigger a surge into the 50% level at .7786. This is a potential trigger point for an acceleration into .7848.

A close over .7721 will form a closing price reversal bottom. If confirmed, this could lead to the start of a 2 to 3 day rally.

For a look at all of today’s economic events, check out our economic calendar.