AUD/USD Forex Technical Analysis – .6982 – .7053 Retracement Zone Controlling Near-Term Direction

The Australian Dollar is trading nearly flat early Wednesday after recovering from earlier losses to nearly unchanged the previous session.

Minutes from the Reserve Bank of Australia’s (RBA) August policy meeting on Tuesday showed that Australia’s central bank still sees a need for more increases in interest rates to prevent high inflation becoming baked into the expectations, but is not on a pre-set path and aims to keep the economy on an even keel, Reuters reported.

At 00:32 GMT, the AUD/USD is trading .7016, down 0.0007 or -0.10%. On Tuesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $69.58, up $0.06 or +0.09%.

Wage Price Index on Tap

The Australian Bureau of Statistics (ABS) will release its quarter update on wages on Wednesday at 01:30 GMT. The report is expected to show modest wage growth despite the highly competitive job market and the rising cost of living.

The Wage Price Index for the second quarter is tipped to lift by around 0.8 percent in the three months to the end of June, for annual growth of 2.7 percent. Wages rose 0.7 percent in the March quarter, with annual growth at 2.4 percent.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7137 will signal a resumption of the uptrend. A move through .6870 will change the main trend to down.

The main range is .7283 to .6682. The AUD/USD closed inside its retracement zone at .6982 to .7053.

The short-term range is .6682 to .7137. Its retracement zone at .6909 to .6856 is the next potential downside target.

Daily Swing Chart Technical Forecast

Trader reaction to the main 50% level at .6982 is likely to determine the direction of the AUD/USD on Wednesday.

Bullish Scenario

A sustained move over .6982 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the main Fibonacci level at .7053. Overcoming this level will be a sign of strength. It could trigger an acceleration to the upside with .7137 the next potential upside target.

Bearish Scenario

A sustained move under .6982 will signal the presence of sellers. This could trigger an acceleration into the short-term 50% level at .6909. This is followed by a main bottom at .6870 and a short-term Fibonacci level at .6856.

Side Notes

The retracement zone at .6982 to .7053 is controlling the near-term direction of the AUD/USD.