The Australian Dollar is trading lower late in the session on Friday after giving up earlier gains. The currency was up most of the day after short-sellers covered amid weakness in the U.S. Dollar.
However, prices started to retreat after the mid-session as U.S. stocks began to fall, dampening demand for higher-risk, higher-yielding assets. The commodity-linked currency was also pressured after gold gave back some of its gains and crude oil turned lower for the day.
At 20:02 GMT, the AUD/USD is at .7065, down 0.0035 or -0.49%. The Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.07, down 0.35 or -0.50%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the February 4 main bottom at .7955 will reaffirm the downtrend.
A move through .7458 will change the main trend to up. This is highly unlikely, but the Forex pair is getting close to entering the window of time for a potentially bullish closing price reversal bottom.
The minor trend is also down. A trade through .7055 will reaffirm the minor trend. This will make .7180 a new minor top.
The minor range is .7458 to .7055. If the minor trend changes to up then look for a surge into its retracement zone at .7257 to .7304.
Short-Term Outlook
Aussie traders are shrugging off the possibility of a 25-basis point rate hike at the May Reserve Bank of Australia (RBA) meeting since the Federal Reserve is widely expected to hike its benchmark rate 50-basis points.
In the meantime, the primary focus appears to be on the COVID-related lockdowns in China that could start weighing on its economic growth. The fear for Aussie traders is that the slow growth in China spreads to Australia.
Worries about a slow economy has also spread to the United States after a report earlier in the week showed a first-quarter contraction in the economy. On top of this, inflation is still running hot. Both factors are contributing to the drop in demand for riskier assets like the AUD/USD.
