AUD/USD Main Trend Changes to Up on Trade Through .7168

The Australian Dollar is being lifted for a third session on Wednesday as global markets priced in the risk of a more drastic tightening by central banks, sending domestic bond yields to three-year peaks.

The Aussie has been benefiting all week from the rise in local bond yields following surprisingly strong U.S. jobs data on Friday and an ongoing hawkish shift by major central banks including the European Central Bank (ECB).

At 08:36 GMT, the AUD/USD is trading .7159, up 0.0012 or +0.18%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.82, up $0.20 or +0.28%.

In other news, a measure of Australian consumer sentiment fell for a third month in February as higher living costs from petrol to rent undermined finances and overshadowed an easing in coronavirus cases.

The Westpac-Melbourne Institute index of Consumer Sentiment released on Wednesday slipped 1.3% in February from January, when it dropped 2.0%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7168 will change the main trend to up. A move through .6967 will signal a resumption of the downtrend.

The short-term range is .7314 to .6967. The AUD/USD is currently testing its retracement zone at .7140 to .7181.

The minor range is .6967 to .7168. Its retracement zone at .7067 to .7044 is support. This zone stopped the selling at .7052 on February 4.

The main range is .7556 to .6967. If the main trend changes to up then its retracement zone at .7262 to .7331 becomes the primary upside target area.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7140.

Bullish Scenario

A sustained move over .7140 will indicate the presence of buyers. The first upside target is the main top at .7168.

Taking out .7168 will change the main trend to up. This could lead to a quick test of the Fibonacci level at .7181. This is the trigger point for an acceleration to the upside with .7262 the next upside target.

Bearish Scenario

A sustained move under .7140 will signal the presence of sellers. If this generates enough downside momentum then look for a break into around .7110. If this level fails then look for the selling to possibly extend into .7067 to .7044.