AUD/USD Forex Technical Analysis – Working on Minor Reversal Bottom Ahead of .7564 Main Bottom

The Australian Dollar is edging higher early Thursday after touching its lowest level since February 2 earlier in the session. The move is likely technical in nature as some traders react to oversold indicators. Despite the early move, safe-haven demand for the U.S. Dollar remains strong. Meanwhile, Treasury yields are inching higher overnight, which could put a lid the Aussie rally.

At 04:36 GMT, the AUD/USD is trading .7606, up 0.0026 or +0.35%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the February 2 main bottom at .7564 will reaffirm the downtrend.

A trade through .7849 will change the main trend to up. This is highly unlikely but due to the steep five-day sell-off, the AUD/USD may be ripe for a minor closing price reversal bottom. This won’t change the main trend, but if confirmed, it could trigger a 2 to 3 day counter-trend rally.

The main range is .7564 to .8007. Its retracement zone at .7733 to .7786 is controlling the near-term direction of the Forex pair. This is resistance.

The short-term range is .7849 to .7579. Its 50% level at .7714 is the first potential upside target. Since the main trend is down, sellers are likely to come in on a test of .7714 to .7733.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to .7580.

Bearish Scenario

A sustained move under .7580 will indicate the presence of sellers. The first target is the February 2 main bottom at .7564. This is a potential trigger point for an acceleration to the downside with the December 21 main bottom at .7462 the next likely downside target.

Bullish Scenario

A sustained move over .7580 will signal the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into .7714 to .7733 over the near-term.

Side Notes

A close over .7580 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day rally. It won’t change the trend to up, but it will indicate the buying may be greater than the selling at current price levels.