After drifting lower shortly after the opening, the Australian Dollar reversed to the upside to move higher for the session in reaction to a jump in shares in Europe and the United States. The early pressure was fueled by stock market weakness in the Asia-Pacific region. The catalyst for the early selling pressure was concern over the jump in U.S. coronavirus cases.
At 09:10 GMT, the AUD/USD is trading .6887, up -.0052 or -0.76%. This is up from a low of .6811.
Fears of a second wave of COVID-19 in Australia also led to the early weakness. A spike in coronavirus infections pushed Australia’s second-most populous state, Victoria, to extend its state of emergency for four more weeks to July 9 on Sunday.
The rebound rally in the Aussie was primarily driven by a shift in risk sentiment. This occurred when U.S. stock index futures turned higher after a weaker opening.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart; however, momentum is trending lower. A trade through .6777 will change the main trend to down. A move through .6977 will signal a resumption of the uptrend.
The main range is .6402 to .7065. Its retracement zone at .6734 to .6655 is support.
The minor range is .6777 to .6977. Buyers are trying to establish support on its pivot at .6877.
The short-term range is .7065 to .6777. Its retracement zone at .6921 to .6955 is potential resistance.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6887, the direction of the AUD/USD is likely to be determined by trader reaction to the 50% level at .6877.
A sustained move over .6877 will indicate the presence of buyers. This could lead to a labored rally with potential targets coming in at .6921, .6955 and .6977. The latter is a potential trigger point for an acceleration to the upside.
A sustained move under .6877 will signal the presence of sellers. This could lead to a retest of .6811. Taking out this level will indicate the selling is getting stronger. Taking out .6777 will change the main trend to down. This could trigger a further break into the main 50% level at .6734.
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This article was originally posted on FX Empire
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