AUD/USD Forex Technical Analysis – Nearest Support .7649, Next Upside Target .7812

The Australian Dollar surged to its highest level since April 2018 on Thursday before retreating late in the session on end-of-the-year profit-taking and position squaring. Now that the Aussie has taken out the June 6, 2018 main top at .7677 with conviction, traders appear to have their eyes set on the April 19, 2018 main top at .7812.

On Thursday, the AUD/USD settled at .7693, up 0.0007 or +0.09%.

Despite the late session weakness, the price action was not that important in the grand scheme of things. Barring any verbal intervention from Reserve Bank of Australia (RBA) policymakers, the AUD/USD is expected to be supported by expectations of additional U.S. government fiscal stimulus and loose Federal Reserve monetary policy.

Additionally, an improving economic outlook as COVID-19 vaccines are rolled out, and rising fiscal and current account deficits should continue to dim the allure of the greenback.

The main trend is up according to the daily swing chart. The uptrend continued on Thursday when buyers took out .7686. A trade through .7339 will change the main trend to down.

The minor trend is also up. A trade through .7557 will change the minor trend to down. This will also shift momentum to the downside.

The first minor range is .7557 to .7742. Its 50% level at .7649 is the first downside target. This is followed by additional 50% support levels at .7602 and .7540.

Taking out .7742 will signal a resumption of the uptrend. If this creates enough upside momentum then look for the rally to possibly extend into the April 19, 2018 main top at .7812.

On the downside, the Aussie appears to be well supported by 50% levels at .7649, .7602 and .7540. Support is also likely to come from a series of minor bottoms at .7557, .7462 and .7372. All of these levels are providing protection in front of the main bottom at .7339.