AUD/USD: Main Trend Up; Momentum Trending Lower

The Australian Dollar is trading flat early Friday as traders awaited the release of the U.S. March Non-Farm Payrolls report at 12:30 GMT. Meanwhile, some traders are already looking toward next week’s Reserve Bank of Australia (RBA) monetary policy meeting.

At 04:43 GMT, the AUD/USD is trading .7480, down 0.0004 or -0.05%. On Thursday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $74.29, down $0.16 or -0.22%.

A strong reading for March payrolls, and particularly for average weekly earnings, could lift the U.S. Dollar broadly, though the market already has a huge amount of tightening priced in for the Federal Reserve.

Meanwhile, traders are also betting the RBA will start hiking as soon as June given that unemployment has fallen to 4% well ahead of forecasts, and core inflation for the first quarter looks likely to spike above 3%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through .7540 will signal a resumption of the uptrend. A move through .7165 will change the main trend to down.

The minor trend is also up. A trade through .7456 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is .7540 to .7456. The AUD/USD is currently trading on the weak side of its pivot at .7498, making it potential resistance.

The short-term range is .7165 to .7540. If the minor trend changes to down then its retracement zone at .7352 to .7308 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to .7498.

Bearish Scenario

A sustained move under .7498 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at .7456.

Taking out .7456 will change the minor trend to down and could trigger an acceleration to the downside with the short-term 50% to 61.8% retracement zone the primary target area.

 Bullish Scenario

A sustained move over .7498 will signal the presence of buyers. If this move generates enough upside momentum then look for a possible surge into the resistance cluster formed by the minor top at .7537 and the main top at .7540. The latter is a trigger point for an acceleration into the October 28, 2021 main top at .7556.