AUD/USD Forex Technical Analysis – Trying to Establish Support at .7212 with .7275 – .7341 Next Target

The Australian Dollar is holding near its multi-week high early Monday on low volume. Monday, December 27 and Tuesday, December 28 are essentially bank holidays in Australia with the financial markets closed because of Christmas and Boxing Day.

There are no major economic reports in the United States either so traders are going to have to rely on risk sentiment for direction. Early Monday, sentiment is looking a little sour in holiday-thinned trading, as uncertainty over the economic impact of the Omicron coronavirus variant weighed on prices.

At 05:56 GMT, the AUD/USD is trading .7229, up 0.0009 or +0.12%. Last Thursday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $71.86, up $0.23 or +0.32%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7252 will signal a resumption of the uptrend. A move through .7083 will change the main trend to down.

The main range is .7556 to .6993. Its retracement zone at .7275 to .7341 is the primary upside target. It is controlling the near-term direction of the Forex pair.

On the downside, the nearest support is a pivot at .7212. This is followed by a pair of 50% levels at .7182 and .7122. Since the main trend is up, buyers are likely to come in on a pullback into .7122 since this level represents value.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7212.

Bullish Scenario

A sustained move over .7212 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a test of last week’s high at .7252.

Taking out .7252 will indicate the buying is getting stronger. This could trigger another surge into the retracement zone at .7275 to .7341. We expect sellers to come in on the first test of this area, mostly on profit-taking.

Bearish Scenario

A sustained move under .7212 will signal the presence of sellers. This could lead to a quick break into .7182. This is a potential trigger point for an acceleration into .7122. Look for buyers on the first test of this level. They may be trying to defend the main bottom at .7083.