Yahoo Finance AUD/USD Forex Technical Analysis – Minor Trend Changed to Up on Move Through .7876
The U.S. Dollar erased early gains fueled by stronger-than-expected inflation data, sending the Australian Dollar sharply higher. Some traders said investors overreacted to the data, given the disappointing retail sales. A rise in U.S. stock markets also signaled increased demand for higher risk assets, helping to underpin the Aussie.
Daily Swing Chart Analysis
The main trend is down according to the daily swing chart. A trade through .7758 will signal a resumption of the downtrend.
The minor trend is up. It turned up on a move through .7876. This shifted momentum to the upside.
The main support is a retracement zone at .7818 to .7743. After a successful test of this zone last week, the market has moved well above the zone. This is also helping to give the Aussie an upside bias, but it does not put it in an uptrend.
The short-term resistance is .8135 to .7758. Its retracement zone at .7947 to .7991 is the primary upside target. Since the main trend is down, sellers could come in on a test of this zone.
Daily Swing Chart Technical Analysis
Based on the upside momentum into the close, the rally is likely to continue with .7947 the first upside target. We could see a technical bounce on the first test of this level due to profit-taking.
Overtaking .7947 will indicate the buying is getting stronger. This could generate the upside momentum needed to challenge the Fibonacci level at .7991.
If there is no follow-through to the upside then the AUD/USD is likely to retracement at least 50% of the rally from .7758 to .7926. This number is likely to change, but at this time it is .7842.
This article was originally posted on FX Empire
