AUD/USD Forex Technical Analysis – Strengthens Over .7099, Weakens Under .7047

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James Hyerczyk

Wed, May 25, 2022, 10:47 PM 2 min read

The Australian Dollar is trading flat early Thursday, following similar action in U.S. Treasury yields and the global equity markets. The price action suggests traders haven’t determined if today will be a ‘risk on’ or a ‘risk off’ session. Helping to put a lid on prices is mixed domestic data.

At 04:22 GMT, the AUD/USD is trading .7086, down 0.0002 or -0.03%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.19, down $0.17 or -0.24%.

U.S. stock futures are mixed in the overnight session as investors digested a disappointing update from Nvidia, an economic bellwether in the technology industry. This news weighed on sentiment and the risk-sensitive Aussie.

Additionally, the Aussie was not helped by data showing Australian business investment fell 0.9% in the first quarter when analysts had looked for a rise of 1.5%.

Furthermore, U.S. Treasury yields provided no guidance either with investors on the sidelines ahead of today’s weekly jobless claims and a second read on first-quarter GDP. Data on pending home sales will follow later in the morning.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through .7266 will change the main trend to up, while a move through .6829 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through .7127 will indicate the momentum is getting stronger.

The AUD/USD is currently trading inside a short-term retracement zone at .7047 to .7099.

On the upside, additional resistance is .7144 to .7218. On the downside, the nearest support is a minor pivot at .6978.

Daily Swing Chart Technical Forecast

Trader reaction to .7099 is likely to determine the direction of the AUD/USD on Thursday.

Bullish Scenario

A sustained move over .7099 will indicate the presence of buyers. The first upside target is the minor top at .7127, followed by a 50% level at .7144. Overcoming this level could trigger an acceleration into a Fibonacci level at .7218.

Bearish Scenario

A sustained move under .7099 will signal the presence of sellers. This could trigger a break into .7047. This is a potential trigger point for an acceleration to the downside with .6978 the next likely target.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire