AUD/USD Forex Technical Analysis – Weakens Under .7145, Strengthens Over .7170

The Australian Dollar is edging lower on Thursday just one day after hitting a new post-virus high. The selling pressure is being fueled by renewed strength in the U.S. Dollar after the Fed minutes on Wednesday failed to deliver the dovish news investors were banking on.

Instead, the minutes released from the FOMC’s last monetary policy meeting in late July showed that central bank policymakers see the U.S. recovery from the coronavirus-induced downturn as “highly uncertain.” This may have increased the greenback’s appeal as a safe-haven asset.

At 09:30 GMT, the AUD/USD is trading .7152, down 0.0032 or -0.45%.

Later today at 12:30 GMT, the U.S. will release its weekly initial jobless claims report that could set the tone for the rest of the session. First-time jobless claims totaled 963,000 last week and are expected to come in at 925,000 for the week-ending August 15, according to a Reuters poll.

The main trend is up according to the daily swing chart, however, momentum may have shifted to the downside with the formation of a closing price reversal top on Wednesday and its subsequent confirmation earlier today.

A trade through .7276 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a break through the nearest swing bottom at .7109.

The minor trend is also up. A trade through .7132 will change the minor trend to down. This will confirm the shift in momentum.

The short-term range is .7064 to .7276. Its retracement zone at .7170 to .7145 is currently being tested. This zone could be controlling the near-term direction of the AUD/USD.

The main range is .6833 to .7276. If the main trend changes to down then its retracement zone at .7054 to .7002 will become the primary target zone.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 7152, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to the short-term Fibonacci level at .7145.

Bullish Scenario

Holding .7145 and sustaining the rally over this level will indicate the return of buyers. This could trigger a rally into the short-term 50% level at .7170.

Overcoming .7170 will indicate the buying is getting stronger, setting up a possible retest of the closing price reversal top at .7276.

Bearish Scenario

A sustained move under .7145 will signal the presence of sellers. This could lead to a test of the minor bottom at .7132, followed by the main bottom at .7109. It will also indicate the selling that formed the reversal top is real and not just profit-taking. This could lead to a minimum 2 to 3 day correction.