AUD/USD Forex Technical Analysis – Weakens Under .6660, Strengthens Over .6671
The Australian Dollar is edging lower on Friday after rebounding from its lowest level since 2020 in the previous session. Traders are still on edge after the U.S. Federal Reserve raised its benchmark interest rate earlier in the week. However, Thursday’s technical reversal suggests traders are a little relieved the move was only 75 basis points since a full-percentage rate hike was also floated at the time.
At 05:00 GMT, the AUD/USD is trading .6619, down 0.0025 or -0.37%. On Thursday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $65.85, up $0.12 or +0.19%.
Short-term, the AUD/USD may be in a position to rally following Thursday’s closing price reversal bottom. However, the long-term still favors the U.S. Dollar because the Federal Reserve is expected to raise rates more aggressively than the Reserve Bank of Australia (RBA).
In economic news, the manufacturing sector in Australia continued to expand in September, and at a fractionally higher pace, the latest survey from S&P Global revealed on Friday with a Manufacturing PMI score of 53.9.
That’s up slightly from 53.8 in August, and it move further above the boom-or-bust line of 50 that separates expansion from contraction.
The survey also showed that the Services PMI improved from 50.2 in August to 50.4 in September, while the composite PMI rose from 50.2 to 50.8.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, Thursday’s closing price reversal bottom suggests momentum may be shifting to the upside. A trade through .6747 will change the main trend to up.
Taking out .6671 will confirm the closing price reversal bottom and could trigger the start of a 2 to 3 day counter-trend rally. A trade through .6574 will negate the closing price reversal bottom, and signal a resumption of the downtrend.
The minor range is .6747 to .6574. Its pivot at .6661 is the nearest resistance.
On the upside, the major resistance is a long-term 50% level at .6759. On the downside, the nearest support target is .6464.
Daily Swing Chart Technical Forecast
Trader reaction to the minor pivot at .6661 is likely to determine the direction of the AUD/USD on Friday.
A sustained move under .6660 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into .6574. Taking out this level could trigger the start of an acceleration to the downside with .6464 the next target.
A sustained over .6661 will signal the presence of buyers. Taking out .6671 will confirm the closing price reversal bottom. This will shift momentum to the upside and could trigger an acceleration into the main top at .6747, followed by the major 50% level at .6759.