AUD/USD: Minor Trend Changes to Down on Trade Through .7456

The Australian Dollar is trading lower against the U.S. Dollar on Thursday, pressured by lower crude oil prices. Nonetheless, the Aussie remains in a position to post hefty gains for the month as commodity prices remain high, and bond yields even higher.

At 09:47 GMT, the AUD/USD is trading .7483, down 0.0027 or -0.37%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $74.40, down $0.10 or -0.13%.

Lower Crude Weighing on Commodity-Linked Currencies

Crude oil prices plunged more than $5 a barrel early Thursday on news the United States was considering the release of up to 180 million barrels from its strategic petroleum reserve, the largest in the near 50-year history of the SPR.

Positive Economic News Will Make It Hard for RBA to Pass on Rate Hike

Domestic economic data was again upbeat with approvals to build new homes surging a huge 43.5% in February, to more than recovery from January’s 27.1% dive. The wild swings suggests the approvals process was disrupted by a wave of Omicron cases in January, and the bounce implies housing construction will remain strong for some time.

There was also positive news on the jobs front with vacancies climbing 6.9% in the February quarter to a record 423,500, with gains across all industries. Such strength suggests unemployment will soon break under 4% for the first time since the 1970s, several months earlier than expected by the Reserve Bank of Australia (RBA).

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on March 28.

A trade through .7540 will negate the closing price reversal top and 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 straddling its pivot at .7498.

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.

The main support is the retracement zone at .7252 to .7185.

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. Taking out the minor bottom at .7456 will change the minor trend to down and confirm the shift in momentum. If this move creates enough downside momentum then look for the selling to possibly extend into the short-term retracement zone at .7352 to .7308. Since the main trend is up, buyers are likely to step in on a pullback into this zone.

Bullish Scenario

A sustained move over .7498 will signal the presence of buyers. If this move generates enough upside momentum then look for a retest of the minor top at .7537, followed by the main top at .7540.

Taking out .7450 will reaffirm the uptrend with the October 28, 2021 main top at .7556 the next target. This is a potential trigger point for an acceleration to the upside with a pair of major targets at .7599 to .7617.