The Australian Dollar is trading marginally higher early Thursday, but inside yesterday’s range. The price action suggests investor indecision and impending volatility. These first few days of the new year, investors have had a lot of information to process including US-China trade talks, economic data and Fed commentary. All have proved to be positives for the Aussie so far.
At 0530 GMT, the AUD/USD is trading .7184, up 0.0015 or +0.22%.
Today’s early strength shows that investors are still being influenced by the positive outcome of the trade talks. However, probably exerting the most upside pressure on the Aussie is expectations that the Fed will take a pause in rate hikes this year.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, momentum has been trending higher since the closing price reversal bottom on January 3. A trade through .7247 will change the main trend to up.
The main range is .7394 to .6764. Its retracement zone at .7079 to .7153 is controlling the direction of the AUD/USD. The Forex pair is currently trading on the strong side of this zone, which has become support.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the steep uptrending Gann angle at .7164 and the Fibonacci level at .7153.
A sustained move over .7164 will indicate the presence of buyers. If this move attracts buyers then look for a retest of yesterday’s high at .7194. Taking out this high could create the upside momentum needed to challenge the main top at .7247.
Taking out .7247 will change the main trend to up. This could trigger a further rally into the nearest downtrending resistance angle at .7264.
The inability to hold above .7164 will indicate the presence of sellers, or that the buying is getting weaker. This could lead to a retest of the main Fibonacci level at .7153.
If selling pressure increases under .7153 then look for a break into a downtrending Gann angle at .7134. This is the trigger point for an acceleration to the downside with the next major target coming in at .7090.
Essentially, we’re looking for the AUD/USD to strengthen over .7164 and to weaken under .7134.
This article was originally posted on FX Empire
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