November 24, 2022
  • November 24, 2022
  • Home
  • Technical Analysis
  • Forex AUD / USD Technical Analysis – Sustained Move Below 0.7118 Pivot Could Trigger A Break At 0.7063

Forex AUD / USD Technical Analysis – Sustained Move Below 0.7118 Pivot Could Trigger A Break At 0.7063

By on December 2, 2021 0

The Australian dollar fell slightly on Thursday as the risk of a faster US Federal Reserve cut and early rate hikes disrupted global markets in favor of the US currency. The news is also helping to support Treasury yields early in the session. Early price action suggests short sellers have their eyes on the 13-month low hit Tuesday night.

At 04:50 GMT, the AUD / USD is trading at 0.7099, down 0.0007 or -0.09%.

While the Fed is expected to pursue more aggressive tightening, the Reserve Bank of Australia (RBA) still insists that a local rate hike is not likely until at least 2023, although the risk is for a move earlier as data shows the economy is rebounding faster than expected. Nonetheless, the US dollar is the most attractive asset at the moment.

Daily AUD / USD

Technical analysis of the daily swing chart

The main trend is downward according to the daily swing chart. A trade at .7063 will signal a resumption of the downtrend. A move through .7556 will change the main trend upward. This is highly unlikely, but due to the prolonged decline in price and time, the Forex pair is ripe for a potentially bullish closing price reversal.

The minor trend is also downward. A new minor low formed Tuesday at 0.7063. A trade through .7173 will change the minor trend upward. This will shift the momentum upward. A trade up to .7063 will indicate that selling pressure is building.

The new minor range is 0.7063 to 0.7173. AUD / USD is currently trading on the weak side of its 0.7118 pivot making it resistance.

If the minor trend arises, look for a test of the next 50% level at 0.7217, followed by the short term retracement area of ​​0.7247 at 0.7291.

Technical forecasts of the daily swing chart

AUD / USD direction on Thursday will likely be determined by traders’ reaction to .7118.

Bearish scenario

A sustained move below .7118 will indicate the presence of sellers. If this move creates enough bearish momentum, wait for the sell to expand to the minor low at 0.7063.

Pulling 0.7063 will indicate that selling pressure is building up with the next targets, the main floor on November 2, 2020 at 0.6991 and the main floor on July 16, 2020 at 0.6963.

Bullish scenario

A sustained move above .7118 will signal the presence of buyers. If this move generates enough bullish momentum then expect the rally to eventually expand to the minor high at 0.7173.

A move up to .7173 will indicate that momentum is building up with a series of retracement levels to .7217, .7247 and .7291 the next likely higher targets.