Australia Markets closed

AUD/USD Forex Technical Analysis – Getting Ready to Test Key Retracement Zone at .6800 to .6770

James Hyerczyk

The Australian Dollar is trading lower on Wednesday. The pressure is coming from renewed concerns over a U.S.-China trade deal, a stronger U.S. Dollar and dovish Reserve Bank minutes.

Traders are worried that negotiations between the two economic powerhouses have hit a snag over the rollback of tariffs. President Trump also threatened to raise tariffs on Chinese goods if the two parties do not strike a deal. Consequently, lower demand for risky assets is making the U.S. Dollar an attractive safe-haven asset. Finally, on Tuesday, the RBA minutes showed policymakers considered a rate cut at its meeting on November 5. This opens the door to a potential rate cut in February.

At 09:06 GMT, the AUD/USD is trading .6806, down 0.0024 or -0.35%.

Daily AUD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6770 will signal a resumption of the downtrend. The main trend changes to up on a move through .6930.

The main range is .6671 to .6930. Its retracement zone at .6800 to .6770 is acting like support. This zone stopped the selling at .6770 last week.

The short-term range is .6930 to .6770. Its retracement zone at .6850 to .6869 is the next potential upside target and resistance.

Daily Technical Forecast

Based on the early price action and the current price at .6806, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the main 50% level at .6800.

Bearish Scenario

A sustained move under .6800 will indicate the presence of sellers. This could trigger a break into the downtrending Gann angle at .6790. Crossing to the weak side of this angle is likely to trigger a further break into the main Fibonacci level and low at .6770.

Bullish Scenario

A sustained move over .6800 will signal the presence of buyers. If this move can generate enough upside momentum over the near-term then look for the rally to possibly extend into a pair of uptrending Gann angles at .6846 and .6849, followed closely by the short-term 50% level at .6850.

Side Notes

The tone of the market will be dictated by U.S.-China trade deal news. Currently, the uncertainty over the rollback of tariffs is creating a negative vibe.

This article was originally posted on FX Empire

More From FXEMPIRE: