AUD/USD Forex Technical Analysis – Upside Target .7252, Downside Target .7179

The Australian Dollar is reversing course early Wednesday following a sharp break the previous session just days after hitting a 2-month high. Several factors are behind the move including a slight recovery in demand for risk, rising Treasury yields and a firmer U.S. Dollar. Nonetheless, the Aussie remains in a precarious position, slightly below retracement zone resistance and resistance zone support.

At 0600 GMT, the AUD/USD is trading .7231, up 0.0016 or +0.20%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7338 will signal a resumption of the uptrend. A move through .7164 will change the main trend to down.

The long-term retracement zone at .7252 to .7307 is resistance.

The main range is .7020 to .7338. Its retracement zone at .7179 to .7141 is the next downside target and potential support.

Daily Swing Chart Technical Forecast

The early price action is giving no indication of what investors want to do today. This is probably because we’re in a headline driven market. Traders are waiting for news to drive the next move. We could also be looking at below average volume ahead of Thursday’s U.S. holiday.

Bullish Scenario

Based on the early price action and the current price at .7231, the first upside target is the main 50% level at .7252. This price could act like pivot. If momentum increases over this level then the Fibonacci level at .7307 will become the next upside target.

Bearish Scenario

If this week’s selling pressure returns then we could see a drive into the short-term 50% level at .7179. This is followed by the main bottom at .7164 and a Fibonacci level at .7141.

Unless there is a major headline, it looks as if we’re in for a sideways trade