The Australian Dollar is trading lower at the mid-session after reversing earlier gains. Renewed concerns over the outcome of U.S.-China trade relations are one reason for the weakness. Worries over the weakening economy and general uncertainty over whether the Reserve Bank will make another rate cut on December 3 are also encouraging longs to bail out of the currency, and aggressive short-sellers to increase selling pressure.
At 18:03 GMT, the AUD/USD is trading .6764, down 0.0006 or -0.08%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the week when sellers took out the November 14 low at .6770.
The main trend changes to up on a trade through the last main top at .6930. This is highly unlikely, however, the AUD/USD is down 21 days from this top. This makes it vulnerable to a dramatic closing price reversal bottom. This chart pattern won’t change the trend to up, but it could signal a 2 to 3 day counter-trend rally. It will also give short-sellers an early change to book profits.
The minor trend is also down. A new minor top was formed earlier in the session at .6780. A trade through this level will change the minor trend to up and shift momentum to the upside.
The main range is .6671 to .6930. Its retracement zone at .6770 to .6801 is resistance. Trading below this area is helping to support the downside bias.
A sustained move under the Fibonacci level at .6770 will indicate the selling pressure is getting stronger. The first downside target is the next main bottom at .6724. This is also an uptrending Gann angle at .6724. We could see a technical bounce on the first test of this area. If it fails then we’re likely to see the selling extend into the next two main bottoms at .6710 and .6671.
Overcoming .6770 will indicate the selling is getting weaker, or the counter-trend buying is getting stronger.
This article was originally posted on FX Empire
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