AUD/USD Forex Technical Analysis – Uptrend Resumes Over .7796, Changes to Down Under .7706

The Australian Dollar is edging higher against the U.S. Dollar on Thursday after overcoming earlier selling pressure. The currency was hit with another wave of sellers after posting another failed rally the previous session. The technical area that stopped the rally on Wednesday has rejected buyer attempts several times this month.

In economic news, Australian business investment jumped by the most in almost a decade in the first quarter as business took advantage of tax breaks to buy new machinery, a major plus for economic growth and productivity.

At 07:47 GMT, the AUD/USD is trading .7749, up 0.0008 or +0.10%.

Thursday’s figures from the Australian Bureau of Statistics showed capital expenditure rose a real 6.3% in the March quarter, from the previous quarter, to A$31.5 billion ($24.36 billion).

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7796 will signal a resumption of the uptrend. A move through .7706 will change the main trend to down.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This zone stopped rallies at .7814 on May 18 and at .7796 on May 26.

The short-term range is .7532 to .7891. Its retracement zone at .7711 to .7669 is support. This zone stopped the selling in May at .7675, .7688 and .7706.

Daily Swing Chart Technical Forecast

Unless a major force shows up to dramatically increase the buying or selling volume, we have to continue to respect the resistance at .7770 to .7826, and the support at .7711 to .7669.

Some traders will read the pattern as a rectangle. Some will see it as an elongated triangle. It really doesn’t matter what one sees because the volume on the breakout above resistance or below support will determine the strength of the next major move.

Just sit tight as the AUD/USD churns between the support and resistance areas. One can continue to buy support and sell resistance, but keep in mind that your last trade will likely be a loser. Furthermore, you can probably make back that last lost if you quickly reverse your position on the first sign of a breakout.