The Australian Dollar is trading lower on Tuesday after Chinese officials confirmed the coronavirus can be spread by human-to-human contact, and the deadly disease is spreading to other Asian countries. Asia Pacific shares closed sharply lower and the Dow is down. Money is flowing into the safe-haven U.S. Treasurys and Japanese Yen, a strong indication that today will be a risk-off trading session.
At 08:38 GMT, the AUD/USD is trading .6849, down 0.0026 or -0.38%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trade through .6849 earlier in the session reaffirmed the downtrend, setting up the AUD/USD for a test of the next main bottom at .6838. A trade through .6934 will change the main trend to up.
The main range is .7082 to .6671. Its retracement zone at .6877 to .6925 is new resistance. This zone is controlling the near-term direction of the AUD/USD.
The short-term range is .6671 to .7032. Its retracement zone is currently being tested. It is potential support.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6849, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the short-term 50% level at .6851.
A sustained move under .6851 will indicate the presence of sellers. Taking out the main bottoms at .6849 and .6838 will indicate the selling pressure is getting stronger. This could extend the weakness into the short-term Fibonacci level at .6809 and another main bottom at .6800. This is a potential trigger point for an acceleration into the next main bottom at .6754.
A sustained move over .6851 will signal the presence of buyers. This could create a labored rally with potential resistance levels at .6877 and .6889.
This article was originally posted on FX Empire
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