Selling Pressure Could Drive AUD/USD into .7153 – .7116

The Australian Dollar is under pressure on Tuesday with the selling fueled by higher U.S. Treasury yields, weak domestic data out of New Zealand and a drop in demand for riskier assets.

The greenback is being underpinned against the Aussie as U.S. Treasury yields hovered near new two-year highs on their return from a long weekend break. Downbeat domestic data from New Zealand put a question mark over expectations for strong economic recoveries this year and weaker global equity markets weighed on demand for riskier currencies.

At 11:32 GMT, the AUD/USD is trading .7190, down 0.0020 or -0.27%. On Friday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $72.18, up $0.02 or +0.03%.

Australian Dollar traders are also positioning themselves ahead of Wednesday’s major Employment Change and Unemployment Rate reports.

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 January 13.

A trade through .7314 will negate the closing price reversal top and signal a resumption of the uptrend. A move through .7130 will change the main trend to down.

The minor range is .7130 to .7314. The AUD/USD is currently trading on the weak side of its retracement zone at .7200 to .7222, making it new resistance.

The short-term range is .6993 to .7314. Its retracement zone at .7153 to .7116 is the next downside target, and a potential trigger point for an acceleration to the downside.

The main range is .7556 to .6993. Its retracement zone at .7275 to .7341 is resistance. It stopped the selling at .7314 on January 13.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7200 to .7222.

Bearish Scenario

A sustained move under .7200 will indicate the presence of sellers. If this creates enough downside momentum then look for a break into .7153 to .7116.

Look for a sharp break into .7083 if .7116 fails as support.

Bullish Scenario

A sustained move over .7222 will signal the presence of buyers. If this move generates enough upside momentum then look for a surge into .7275.