The Australian Dollar is trading lower on Tuesday, but rebounding enough from early session weakness to put it in a position to turn higher for the session. Weighing on the Aussie earlier in the session were rising Treasury yields as U.S. traders picked up where they left off last week, following Monday’s bank holiday.
Yesterday, the Aussie Dollar was pressured by pessimistic comments from President Trump on Friday which indicated he has not agreed to rollback tariffs as previously reported.
Providing additional support for the Australian Dollar on Tuesday is the NAB Business Confidence Index, which printed a reading of 2 which reveals that business conditions have improved in October after coming in flat in September.
At 08:25 GMT, the AUD/USD is trading .6843, down 0.0008 or -0.11%.
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 on October 31 at .6930.
A trade through .6930 will negate the closing price reversal top and signal a resumption of the uptrend. A move through .6809 will change the main trend to down.
Tuesday’s session began with the AUD/USD down eight sessions since its last main top. This puts it inside the window of time for a potentially bullish closing price reversal bottom. Short-sellers should be on alert for this chart pattern in order to protect profits.
The major retracement zone resistance is .6877 to .6925. This zone essentially stopped the rally at .6930.
The short-term range is .6809 to .6930. Its retracement zone at .6855 to .6870 is new resistance. On Monday, the AUD/USD closed on the weak side of this zone, putting it in a bearish position.
The main range is .6671 to .6930. Its retracement zone at .6800 to .6770 is the primary downside target. Look for buyers to show up on the first test of this zone.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at .6850.
A sustained move under .6850 will indicate the presence of sellers. This could drive the AUD/USD into a pair of uptrending Gann angles at .6819 and .6816. If .6816 fails as support then look for the selling to possibly extend into the main bottom at .6809, followed closely by the main 50% level at .6800.
A sustained move over .6850 will signal the presence of buyers. The first upside target is a short-term Fib level at .6855. Overcoming this angle could generate the upside momentum needed to challenge a pair of 50% angles at .6870 and .6877, followed by a downtrending Gann angle at .6890.
This article was originally posted on FX Empire
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