AUD/USD Forex Technical Analysis – Big Test for Counter-Trend Buyers at .6098 to .6236The short-term range is .6685 to .5510. Its retracement zone at .6098 to .6236 is the primary upside target. Since the main trend is down, sellers are expected to come in on a test of this area.
The Australian Dollar is trading higher on Wednesday after the White House and Senate leaders reached a deal on a $2-trillion coronavirus stimulus bill. Senate Majority Leader Mitch McConnell tweeted earlier today that the Senate had reached a bipartisan agreement on the historic funding bill intended to cushion the economic blow from the coronavirus pandemic, with a vote scheduled later today.
At 09:28 GMT, the AUD/USD is trading .6060, up 0.0105 or +1.76%.
The news helped drive up demand for risky assets and higher-yielding commodity-based currencies like the Aussie Dollar. Additionally, this week’s aggressive activity from the Fed flooded the financial markets with cash, further loosening tight liquidity conditions and making the U.S. Dollar a less-desirable asset.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .5510 will signal a resumption of the downtrend. A trade through .6685 will change the main trend to up.
The short-term range is .6685 to .5510. Its retracement zone at .6098 to .6236 is the primary upside target. Since the main trend is down, sellers are expected to come in on a test of this area. A downtrending Gann angle at .6205 also passes through this zone, making it a valid upside target.
Daily Technical Forecast
The key support angle guiding the AUD/USD higher comes in at .5830.
If the intraday upside momentum continues then look for a test of the 50% level at .6098. Watch for sellers to come in on the first test of this level.
Overtaking .6098 will indicate the buying is getting stronger. This could lead to a test of the downtrending Gann angle at .6205. Once again, look for sellers on the first test of this angle.
Taking out the potential resistance angle at .6205 could trigger a surge into the short-term Fibonacci level at .6236. Taking out this level will indicate that the buying is overwhelming the sellers.
Trader reaction to .6098 to .6236 will determine the near-term direction of the AUD/USD. Sellers are going to try to form a secondary higher bottom on a test of this zone. Buyers are going to try to drive through this area.
The current move is all about demand for risk and the easing of liquidity concerns.