AUD/USD Stengthens Over .7331, Weakens Under .7328

The Australian Dollar is trading at a four-month high Friday after recovering from an early setback. The catalyst behind the Aussie’s strength are the massive gains in commodity prices promised to shower the country in cash.

At 07:10 GMT, the AUD/USD is trading .7349, up 0.0021 or +0.29%. On Thursday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $72.59, up $0.18 or +0.25%.

Prices were pressured early in the session as demand for riskier assets dropped following reports that smoke was visible from a nuclear power plant in Ukraine – the largest in Europe – after Russian troops attacked. But those losses were later pared after the nuclear power plant’s director said the facility’s nuclear reactor is secured at the moment. Ukrainian authorities also posted a subsequent update that the fire had been put out.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at .7363 will signal a resumption of the uptrend. A move through .7086 will change the main trend to down.

The minor trend is also up. A trade through .7095 will change the minor trend to down. This will shift momentum to the downside.

The momentum could also shift to the downside if a closing price reversal top is formed and confirmed.

The main range is .7556 to .6967. The AUD/USD is currently trading on the strong side of its retracement zone at .7331 to .7261, making it support.

The short-term range is .6967 to .7363. Its retracement zone at .7165 to .7118 is the nearest support. This zone will move up as the AUD/USD moves higher.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Friday is likely to be determined by trader reaction to .7328.

Bullish Scenario

A sustained move over .7328 will indicate the presence of buyers. Holding above the Fibonacci level at .7331 will indicate the buying is getting stronger. A move through the intraday high at .7363 could trigger an acceleration to the upside with the November 9, 2021 main top at .7431 the next major upside target.

Bearish Scenario

A sustained move under .7328 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main 50% level at .7261. This is a potential trigger point for an acceleration into the short-term retracement zone at .7165 – .7118.