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AUD/USD Forex Technical Analysis – May Be Forming Secondary Higher Bottom Ahead of Labor Report

James Hyerczyk

A report showing soft wages hit the Australian Dollar early in the session, but aggressive counter-trend buyers were there to stop the price. Later in the session. The Aussie fell to a new low when the yield on the 10-year Treasury note hit a new multiyear high Wednesday, topping 3.1 percent for the first time since 2011. This move also drew the attention of buyers, turning the currency higher about an hour before the close. Short-covering ahead of Thursday’s Employment Change and Unemployment Rate reports may have been the catalyst behind the late session move.

At 2011 GMT, the AUD/USD is trading .7516, up 0.0050, up 0.67%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, the AUD/USD may be forming a secondary higher bottom since aggressive counter-trend buyers came in at .7447, in defense of the main bottom at .7412.

A trade through .7566 will change the main trend to up. A move through .7447 will signal the return of sellers. A trade through .7412 will signal a resumption of the downtrend.

The main range is .7812 to .7412. If the trend changes to up then its retracement zone at .7612 to .7659 will become the primary upside target.

The short-term range is .7412 to .7566. Its retracement zone is .7489 to .7471. Another short-term range is .7566 to .7447. Its 50% level or pivot is .7507. The AUD/USD straddled the retracement levels on Wednesday and is in a position to close over this area.

Daily Swing Chart Technical Forecast

Based on the late session price at .7516 and the earlier price action, it looks like the bias and momentum may be shifting to the upside.

A sustained move over .7516 will indicate the presence of buyers. If this creates enough upside momentum, the AUD/USD may make a run at .7566, followed by the main 50% level at .7612.

A sustained move under .7516 will signal the presence of sellers. This could trigger a labored break into a 50% level at .7489, a Fibonacci level at .7471 and Wednesday’s low at .7447.

If .7447 fails as support then sellers may come in hard, driving the AUD/USD into the main bottom at .7412. This is followed by a pair of bottoms at .7372 and .7329.

This article was originally posted on FX Empire