Yahoo Finance AUD/USD Forex Technical Analysis – Momentum Trending Higher with .7099 Today’s Target, Followed by .7144
The Australian Dollar is inching higher on Friday after an early session setback. The currency is being helped by a weaker U.S. Dollar, which is being weighed down by a retreat in Treasury yields.
The Aussie is also being underpinned by positive developments in China although the country’s path out of coronavirus lockdowns remains unclear. Late this week, China eased some restrictions in Shanghai including allowing more businesses in zero-COVID areas to resume normal operations from the beginning of June and its ports now operating at 90% capacity.
Early Friday, China also announced a cut to a key lending benchmark to cushion its economic slowdown.
At 07:24 GMT, the AUD/USD is trading .7044, down 0.0004 or -0.05%. On Thursday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $69.85, up $0.91 or +1.32%.
Finally, AUD/USD short sellers covered their positions aggressively on Thursday, helping to send the Aussie sharply higher. The move was largely supported by a dip in the domestic unemployment rate. The news solidified a 25-basis point rate hike by the Reserve Bank of Australia (RBA) at its next meeting in June.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .6829 will signal a resumption of the downtrend. A move through .7266 will change the main trend to up.
The minor trend is up. This is controlling the momentum. A move through .6949 will change the minor trend to down.
The minor range is .6829 to .7073. Its 50% level or pivot at .6951 is support.
The short-term range is .7266 to .6829. Traders are currently testing its retracement zone at .7048 to .7099.
The intermediate range is .7458 to .6829. Its retracement zone is another target zone and potential resistance.
Daily Swing Chart Technical Forecast
Trader reaction to .7048 will likely determine the direction of the AUD/USD on Friday.
Bullish Scenario
A sustained move over .7048 will indicate the presence of buyers. Taking out yesterday’s high at .7073 will indicate the buying is getting stronger with the Fibonacci level at .7099 the next target.
Sellers could come in on the first test of .7099, but overtaking this level could trigger a surge into the next resistance area at .7144 to .7218.
Bearish Scenario
A sustained move under .7047 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor pivot at .6951.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
