AUD/USD Forex Technical Analysis – Bullish Over .7588, Bearish Under .7575

The AUD/USD retreated on Tuesday, pressured by rising U.S. Treasury yields and a stronger U.S. Dollar. The catalysts behind the price action were improving risk sentiment, the confirmation hearing of new Federal Reserve Chair Jerome Powell and the news that the Senate Budget Committee advanced the Republican tax bill.

Daily Swing Chart analysis

The main trend is down according to the daily swing chart. On Monday, the AUD/USD reversed to the downside after posting a four-day rally. Early Tuesday, follow-through selling pressure confirmed the reversal, making .7644 a new main top.

A trade through .7644 will change the main trend to up. A move through .7532 will change the main trend to down.

The major retracement zone is .7641 to .7527. This zone is controlling the longer-term direction of the market. The AUD/USD is currently trading inside this range.

The short-term range is .7532 to .7644. Its retracement zone is .7588 to .7575. This zone is very important to the structure of the current chart pattern.

Aggressive counter-trend buyers may come in on a test of .7588 to .7575. They are going to try to produce a potentially bullish secondary higher bottom. If successful, this could trigger a retest of .7644 and perhaps a breakout to the upside.

Bearish trend traders are going to try to drive the AUD/USD through .7575 in an effort to reaffirm the main top at .7644 and drive the Forex pair into .7527 and perhaps through it.

Daily Swing Forecast

The next move in the market will be determined by trader reaction to .7588 to .7575.

A sustained move over .7588 will indicate the presence of buyers. This could create the upside momentum needed to take out .7644 and trigger a possible acceleration to the upside.

A sustained move under .7575 will signal the presence of sellers. This is the trigger point for an acceleration into .7532 then .7527.

If .7527 fails as support under the pressure of big volume selling, we could see a sharp break with the June 2 bottom at .7372 the next target over the near-term.