The Australian dollar came under pressure on Friday following the publication of the Reserve Bank’s (RBA) Financial Stability Review. The RBA said heightened risk from optimistic borrowers could lead to increased risk in the housing market, even if banks maintain lending discipline.
In a six-month audit of the financial system, the Reserve Bank downplayed the threat of rapidly rising house prices to financial stability, saying it was not accompanied by a buildup of debt.
At 04:54 GMT, AUD / USD is trading at 0.7633, down 0.0021 or -0.28%.
Technical analysis of the daily fluctuation chart
According to the daily fluctuation chart, the main trend is up. Trading through 0.7677 will signal a resumption of the uptrend. The main trend will change to a downtrend when passing through 0.7532.
The lowest range is from 0.7532 to 0.7677. Its retracement zone from 0.7604 to 0.7587 is potential support. Buyers can intervene to test this area to form a potentially bullish secondary higher bottom.
The short-term range is 0.7849 to 0.7532. Its retracement zone from 0.7691 to 0.7729 is potential resistance.
The main range is 0.8007 to 0.7532. Its retracement zone from 0.7770 to 0.7826 is the main target for the upside.
Daily Swing Chart Technical Forecast
The Australian dollar starts the session inside the pair of correction zones from 0.7604 to 7587 and from 0.7691 to 0.7729. Since the main trend is upward, our work assumes that the direction of the AUD / USD pair on Friday will be determined by the trader’s reaction to the minor 50% level at 0.7604.
A sustained move above 0.7604 will indicate the presence of buyers. If this move creates sufficient upward momentum, look for a continuation of the move to 0.7677.
Taking 0.7677, it would indicate that buying is strengthening, with the next likely upside target from 0.7691 to 0.7729.
A sustained move below 0.7604 will indicate the presence of sellers. The next downside target is the minor Fibonacci level at 0.7587. Buyers can test this level, but if it fails, look for acceleration downwards with a major bottom at 0.7532, which will be the next potential target.
I have a tendency to grow, but I have no catalysts to lift the market. Falling Treasury yields, weakening the US dollar and hitting record highs in global equity markets should have been enough for the Australian dollar to rise sharply. I suspect that buyers are being held back by falling Australian government bond yields, so we may continue to see price sideways movement until yields stabilize.