AUD/USD Underpinned by Rate Hike Chatter

The Australian Dollar is rebounding for a second straight session on Thursday as a sudden change in market sentiment brought back the buyers, following a steep decline earlier in the week.

The Aussie is also being supported by a hawkish outlook for interest rates after Goldman Sachs became the most recent financial institution to convey ahead its forecast for price hikes, predicting strikes in August and September rather than just on hike in November.

At 08:25 GMT, the AUD/USD is trading .7333, up 0.0013 or +0.17%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $72.63, up $0.52 or +0.71%.

The Goldman news comes one day after Reserve Bank of Australia (RBA) Governor Philip Lowe on Wednesday said a move was plausible later in the year, though Australia had more scope to wait than some other developed nations.

With financial institutions calling for aggressive rate hikes and the RBA preaching patience, the AUD/USD is likely to become one of the most volatile currencies over the next five to eight months.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the March 7 closing price reversal top.

A trade through .7086 will change the main trend to down. A move through .7441 will negate the closing price reversal top and signal a resumption of the uptrend.

The main range is .7556 to .6967. The AUD/USD is currently testing its retracement zone at .7261 to .7331.

On the upside, the minor range is .7441 to .7245. Its pivot at .7366 is the next upside target and potential resistance.

On the downside, the minor range is .7095 to .7441. Its pivot at .7227 is the next target and potential support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the main Fibonacci level at .7331.

Bullish Scenario

Overtaking .7331 will indicate the buying is getting stronger. This could trigger a further rally into the minor Fibonacci level at .7366. This is a potential trigger point for an acceleration to the upside with the next target .7441.

Bearish Scenario

A sustained move under .7331 will signal the presence of sellers. This could trigger a further break into the main 50% level at .7261, followed by the minor Fibonacci level at .7227.

If .7227 fails as support then look for the selling to possibly extend into the short-term retracement zone at .7173 to .7125.