The AUD/USD is trading higher shortly before the U.S. session opening. Earlier in the session, the Forex pair fell to its lowest level since July 11 in response to disappointing economic news from China. However, the market reversed to the upside and turned positive in response to a solid NAB Business Confidence report.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, today’s price action has put the AUD/USD in a position to post a potentially bullish closing price reversal bottom. This will not mean the trend is changing to up, but it could lead to a 2 to 3 day correction.
A trade through .7608 will signal a resumption of the downtrend. If this generates enough downside momentum, we could see a pullback into the July 5 bottom at .7571.
The short-term range is .7729 to .7608. If the rally continues then its retracement zone at .7668 to .7683 will become the primary upside target.
Daily Technical Forecast
Based on the current price at .7632, the key levels to watch are today’s intraday high at .7638 and yesterday’s close at .7623.
A sustained move over .7638 will indicate the buying is getting stronger. If this creates enough upside momentum then look for a minimum test of .7668.
The inability to extend the gains will signal the return of sellers. However, the first sign of weakness will be a sustained move under yesterday’s close at .7623. This move will also negate the potential closing price reversal bottom.
This article was originally posted on FX Empire
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