Forex AUD / USD Technical Analysis – On Track for End-September Bottom Test at .7170
The Australian dollar is trading flat on Wednesday morning after coming under pressure in the previous session by rising US Treasury yields, which increased the appeal of the US dollar. The catalyst continued to raise bets on a faster Federal Reserve amortization rate and an earlier-than-expected rate hike.
This week’s selling pressure is also fueled by the appointment of Fed Chairman Jerome Powell for a second term, which is seen by market participants as a hawk at this point in the interest rate cycle.
At 01:19 GMT, the AUD / USD is trading at 0.7223, down 0.0004 or -0.05%.
Technical analysis of the daily swing chart
The main trend is downward according to the daily swing chart. A trade through .7207 will signal a resumption of the downtrend. A move through .7431 will change the main trend upward.
The minor trend is also downward. A trade through .7371 will change the main trend upward. This will shift the momentum upward.
The minor range is 0.7371 to 0.7207. Its 50% level at 0.7289 is the closest resistance.
The main resistance is the retracement area of 0.7318 to 0.7363. It controls the short-term direction of the AUD / USD.
Technical forecasts of the daily swing chart
AUD / USD direction on Wednesday will likely be determined by traders’ reaction to .7227.
A sustained move below .7227 will indicate the presence of sellers. This could trigger a rapid breakout in .7207. This price is a potential trigger point for a downward acceleration with the September 29 low at 0.7170 the next likely target.
A sustained move above .7227 will signal the presence of buyers. Removing .7236 will indicate that the purchase is getting stronger. If this move creates enough bullish momentum, then wait for the rally to eventually expand to the minor pivot at 0.7289.
Notes to the appendix
Thursday is a statutory holiday in the US and Friday will likely be treated as such, so we could see a big drop in volume this weekend. Today’s early price action suggests that volume may already be falling, so be careful when buying strength and selling weakness.