The Australian Dollar is trading nearly flat on Wednesday after hitting its highest level since July 31. The currency is encountering resistance, but a slight shift in investor sentiment continues to underpin the market. Investors have become increasingly optimistic that the resumption of trade talks between the U.S. and China will bring the two economic powerhouses closer to ending the trade dispute.
At 09:21 GMT, the AUD/USD is trading .6863, up 0.0002 or +0.02%.
According to reports, China offered to buy more agricultural products from the United States. Beijing also released a tariff exemptions list for products from the U.S. on Wednesday.
Financial futures traders have also pushed a potential rate cut by the Reserve Bank of Australia (RBA) from October to November. Aussie Dollar traders are adjusting positions to this news.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher.
The main range is .7082 to .6677. Its retracement zone at .6880 to .6927 is controlling the near-term direction of the AUD/USD. The Forex pair is currently testing the lower or 50% level of this zone at .6880.
A downtrending Gann angle at .6892 is passing through this zone, making it a valid upside target.
Daily Technical Forecast
Based on the early price action and the current price at .6863, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at .6880.
A sustained move under .6880 will indicate the presence of sellers. The daily chart is wide open to the downside so this could trigger a sharp break if heavy selling volume is present. The first target angle comes in at .6808.
A sustained move over .6880 will signal the presence of buyers. The first target angle is .6892. Since the trend is down, sellers could come in on a test of these levels.
Overcoming .6892 will indicate the buying is getting stronger. If this creates enough upside momentum then look for the rally to possibly extend into a Fibonacci level at .6927, followed by a steep uptrending Gann angle at .6928.
Crossing to the strong side of the angle at .6928 will put the AUD/USD in a bullish position.
This article was originally posted on FX Empire
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