The AUD/USD is trading lower on Wednesday in reaction to weaker than expected domestic economic data. According to the Australian Bureau of Statistics, Australia’s economy grew 0.6 percent in seasonally adjusted terms for the September quarter, following a 0.9 percent increase in the April-June period. Traders were looking for 0.7 percent growth in the quarter.
On Tuesday, the Reserve Bank of Australia (RBA) said in its policy statement that it expected the economy to grow on average around 3 percent over the next few years. Today’s GDP data showed the economy grew 2.8 percent over the year.
Sellers hit the AUD/USD hard on the miss, wiping out all of yesterday’s gains and turning the Forex pair lower for the week.
Daily Swing Chart Analysis
The main trend turned up on Tuesday according to the daily swing chart, however, momentum shifted to the downside early Wednesday.
A trade through .7653 will signal a resumption of the uptrend. If this move generates enough upside momentum, the rally could extend into the November 2 main top at .7729.
A trade through .7551 will change the main trend to down. This is followed by the next main bottom at .7532. This bottom is a possible trigger point for an acceleration into the June 2 bottom at .7372.
Daily Swing Chart Forecast
The short-term range is .7551 to .7653. Its 50% level or pivot is .7602. Based on the current price at .7591, this price is controlling the direction of the AUD/USD today.
A sustained move under .7602 will indicate the presence of sellers. If this move generates enough downside momentum, we could see the selling extend into the last main bottom at .7551, followed by .7532 and .7527. If .7527 is taken out with conviction, look out to the downside. We could see the start of a steep sell-off.
Overcoming and sustaining a rally over .7602 will signal the return of buyers. This could trigger a labored rally with potential resistance coming in at .7631, .7642, .7653 and .7654.
As you can see, the AUD/USD is going to have a hard time rallying because of the resistance levels. Buyers are going to have to overcome the levels and breakout over .7653 with rising volume in order to fuel the next major move into .7729.
This article was originally posted on FX Empire
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