Forex AUD / USD Technical Analysis – Short term bearish below .7318
The Australian dollar was down slightly on Wednesday night as the US dollar continued to strengthen with the prospect of the Federal Reserve starting to hike rates in mid-2022. What’s more, Fed officials have contributed to the more hawkish view of US interest rates as the central bank grapples with stubbornly high inflation.
At 8:18 p.m. GMT, the AUD / USD is trading at 0.7195, down 0.0032 or -0.44%.
San Francisco Fed Chairman Mary Daily said on Wednesday she could see arguments put forward to speed up the Fed’s reduction in bond purchases. Fed Vice Chairman Richard Clarida said last week that it might be appropriate to discuss accelerating the pace of its reduction at the Fed’s December 14-15 meeting.
Technical analysis of the daily swing chart
The main trend is downward according to the daily swing chart. Trade through the intraday low at .7184 will signal a resumption of the downtrend towards the close and early Thursday.
A move through .7431 will change the main trend upward. This is highly unlikely, but due to the prolonged decline in price and time, the AUD / USD is in the time window for a closing price reversal low. This will not change the main uptrend, but if confirmed, it could trigger the start of a 2-3 day countertrend rally.
The minor range is 0.7371 to 0.7228. Its 50% or pivot level at 0.7278 is the closest bullish target and potential resistance level.
The main resistance is the retracement area at 0.7318 to 0.7363. This zone controls the short-term direction of the AUD / USD.
Technical forecasts of the daily swing chart
Wednesday’s bearish momentum suggests traders could move towards the main September 29 low at 0.7170. Removing this level will reaffirm the downtrend. If the volume is strong enough, look for selling pressure to eventually expand to the major August 20 low at 0.7106.
While the AUD / USD may be ripe for a closing price reversal and ensuing short hedging rally, don’t expect a strong rally unless buyers can overcome the 50% level. short term to 0.7363. It is not only resistance, but also a trigger point for upward acceleration.