The AUD/USD is under pressure on Tuesday, driven lower by rising U.S. Treasury yields. The tightening of the spread between U.S. Government Bonds and Australian Government Bonds is helping to make the U.S. Dollar a more attractive investment.
The weakness began earlier in the session when investors failed to react to positive news about Australian construction.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7874 will signal a resumption of the uptrend. This could trigger a rally into the next main top at .7897.
Today’s price action has made .7874 a new main top. Although the market is down two days from its recent high, the trend is still up. However, momentum may be getting ready to shift to the downside.
The main range is .7897 to .7501. If the selling pressure continues then we could see a test of its retracement zone at .7746 to .7699.
Daily Technical Forecast
Based on the earlier price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the long-term downtrending Gann angle at .7822.
A sustained move under .7822 will indicate the selling is getting stronger. The daily chart indicates there is plenty of room to the downside so we could see an acceleration into .7746.
Overcoming and sustaining a rally over .7822 will signal the return of buyers. If this move creates enough upside momentum then we could see a move into .7860 then .7874.
This article was originally posted on FX Empire
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