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The Australian Dollar is down on Thursday, amid rising risk aversion on renewed worries about high inflation, slowing growth and the outlook for interest rates. Investors are being spooked by the lowering of global growth forecasts by the World Bank and the Organization for Economic Cooperation and Development (OECD).
At 09:29 GMT, the AUD/USD is trading .7186, down 0.0004 or 0.05%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $71.29, down $0.41 or -0.57%.
On Tuesday, the World Bank lowered its 2022 growth forecast. The OECD said on Wednesday that the global growth is set to slow sharply this year than previously forecast as the war in Ukraine triggered a cost-of-living crisis and the zero-COVID policy of China added to supply chain disruption.
Looking ahead, traders will get the opportunity to react to the latest European Central Bank’s monetary policy announcement due later today, and the crucial data on U.S. consumer inflation due on Friday.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .7283 will signal a resumption of the uptrend. A move through .6829 will change the main trend to down.
The minor trend is up. A trade through .7157 will change the minor trend to down. The downtrend will be reaffirmed if .7141 is taken out.
Currently, the AUD/USD is trading inside an intermediate retracement zone at .7143 to .7218.
On the upside, the major resistance is a retracement zone at .7245 to .7343. The recent rally was stopped by this area at .7283 last week.
On the downside, if the nearest support is the short-term retracement zone at .7056 to .7002.
Daily Swing Chart Technical Forecast
Trader reaction to .7202 is likely to determine the direction of the AUD/USD on Thursday.
Bearish Scenario
A sustained move under .7201 will indicate the presence of sellers. The first downside target is the support cluster at .7143 – .7141.
Taking out .7141 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with .7056 the next key target price.
Bullish Scenario
A sustained move over .7202 will signal the presence of buyers. This could lead to a labored rally with potential resistance coming in at .7218 and a resistance cluster at .7245 – .7246.
Overtaking .7246 could trigger a surge into the main top at .7283. This is a potential trigger point for an acceleration into the main Fibonacci level at .7343.
For a look at all of today’s economic events, check out our economic calendar.