Aussie Down Sharply with Sellers Targeting .7140 – .7125

The Australian Dollar is under pressure early Thursday amid intensifying fears that a full-scale Russian invasion of Ukraine was imminent. The Aussie tumbled as investors shed riskier assets for the safety of the U.S. Dollar as Russian President Putin ordered troops into Ukraine. According to Reuters, Putin authorized military action in Ukraine’s breakaway region of Donbass.

At 04:28 GMT, the AUD/USD is trading .7178, down 0.0055 or -0.75%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $71.72, up $0.18 or +0.26%.

“The situation certainly looks like it’s going to get worse before it gets better, and that means the commodity currencies can weaken,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7284 will change the main trend to up. A move through .7086 will change the main trend to down.

The main range is .7556 to .6967. Its retracement zone at .7262 to .7331 is resistance. It stopped the rally at .7284 on Wednesday.

The short-term range is .7314 to .6967. The AUD/USD is currently testing its retracement zone at .7181 to .7140.

A second short-term range is .6967 to .7284. Its retracement zone at .7125 to .7088 is another potential downside target.

The two short-term 50% levels at .7140 to .7125 is an important support cluster.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD early Thursday is likely to be determined by trader reaction to the Fibonacci level at .7181.

Bearish Scenario

A sustained move under .7181 will indicate the presence of sellers. This could trigger a break into the support cluster at .7140 to .7125. Look for a technical bounce on the first test of this area. If .7125 fails as support then look for the selling to possibly extend into .7088. This is the last potential support before the .7086 main bottom.

Bullish Scenario

A sustained move over .7181 will signal the presence of buyers. This could trigger a quick intraday rally into .7227. Sellers could come in on the first test of this level. Overcoming it will likely lead to a retest of .7262 to .7284.