The AUD/USD finished higher on Wednesday and inside the previous day’s range as investors reacted to reports that the implementation of the corporate tax cuts in the tax reform plan may be delayed until mid-2018.
This news could affect U.S. economic growth which could weaken the U.S. Dollar because it will likely mean the Fed may have to adjust the number of rate hikes it has planned for 2018.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. However, momentum may be shifting to the upside with the potential formation of a secondary higher bottom at .7627.
The main trend will change to up on a trade through .7729. The downtrend will resume if .7624 fails as support. This could drive the AUD/USD into the July 5 bottom at .7571.
Daily Retracement Zone Analysis
The short-term range is .7624 to .7729. Its 50% level or pivot is .7676. This price is controlling the short-term direction of the Forex pair. Momentum could shift to the upside if buyers can sustain a move over the pivot.
The main range is .7897 to .7624. Its retracement zone is .7761 to .7793. Inside this zone is a major Fibonacci level at .7782. If the rally gains enough traction to turn the main trend to up then these retracement levels will become the primary upside targets.
Watch the price action and read the order flow at .7676 all session on Thursday. Trader reaction to this level will tell us if the buying is getting stronger or if sellers are still in control.
This article was originally posted on FX Empire
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