AUD/USD Forex Technical Analysis – Mixed Trade Likely Over Near-Term

The Australian Dollar is trading higher against the U.S. Dollar late Friday after a survey showed U.S. consumer sentiment dropped sharply in early August, raising worries of a dent in economic activity.

The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of this month from a final reading of 81.2 in July. That was the lowest level since 2011 and one of the six largest drops in the past 50 years of the survey.

At 19:12 GMT, the AUD/USD settled at .7373, up 0.0036 or +0.49%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7290 will signal a resumption of the downtrend. A move through .7427 will change the main trend to up.

The minor trend is also down. However, a new minor bottom has formed at .7316.

The minor range is .7290 to .7427. The AUD/USD is currently trading on the strong side of a 50% level at .7358.

Resistance is a long-term Fibonacci level at .7379, followed by a short-term retracement zone at .7397 to .7422.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD into the close on Friday is likely to be determined by trader reaction to .7379.

Bearish Scenario

A sustained move under .7379 will indicate the presence of sellers. The first downside target is .7385. If this level fails as support then look for the selling to possibly extend into the minor bottom at .7316.

Bullish Scenario

A sustained move over .7379 will signal the presence of buyers. This could lead to a labored rally with potential upside targets coming in at .7397 and a resistance cluster at .7422 to .7427.