The Australian Dollar is trading slightly better early Wednesday, but inside yesterday’s range which suggests investor indecision and impending volatility. The Aussie was boosted on Tuesday by the Reserve Bank of Australia (RBA), which passed on a rate cut as expected, but also signaled it was likely taking a break from further rate cuts.
At 04:24 GMT, the AUD/USD is trading .6898, up 0.0005 or +0.07%.
The Australian Dollar was up sharply early in the session on Wednesday, but prices collapsed into the close after the ISM US Non-Manufacturing PMI report came in better-than-expected, sparking a huge recovery in the U.S. Dollar. The news was bullish for the greenback because it reduced the chances of a recession.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at .6930 on October 31.
A trade through .6930 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through the last swing bottom at .6809.
The main range is .7082 to .6671. The AUD/USD is currently trading inside its retracement zone at .6876 to .6925. Trader reaction to this zone will determine the near-term direction of the Forex pair.
Daily Technical Forecast
Based on the early price action and the current price at .6898, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the long-term downtrending Gann angle at .6887.
A sustained move over .6887 will signal the presence of buyers. If this creates enough upside momentum then look for a possible drive into the Fibonacci level at .6925 and the main top at .6930.
The main top at .6930 is a potential trigger point for an acceleration to the upside
A sustained move under .6887 will indicate the presence of sellers. The first downside target is the 50% level at .6876. This is followed closely by an uptrending Gann angle at .6874.
The Gann angle at .6874 is a potential trigger point for an acceleration to the downside.
This article was originally posted on FX Empire
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