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James Hyerczyk
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AUD/USD

The Australian Dollar is inching higher against the U.S. Dollar early Wednesday following a slight improvement in consumer sentiment. Traders are now looking ahead to the Reserve Bank of New Zealand’s interest rate decision at 02:00 GMT and the first day of testimony by Federal Reserve Chair Jerome Powell at 16:00 GMT. On Thursday, Australia will release its latest data on Employment Change and the Unemployment Rate.

At 0:53 GMT, the AUD/USD is trading .7450, up 0.0004 or +0.06%.

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The Westpac-Melbourne Institute Index of Consumer Sentiment rose by 1.5% to 108.8 in July from 107.2 in June. The survey was conducted over the week of July 5-9, during the lockdown in Sydney and restrictions in regional NSW but before the tightening of restrictions announced on July 9.

In other news, on Tuesday, the AUD/USD plunged after data showed U.S. inflation data for June coming in hotter than expected, raising the prospect that inflationary concerns are set to linger. U.S. consumer prices rose by the most in 13 years in June amid supply constraints and a continued rebound in the costs of travel-related services from pandemic-depressed levels as the economic recovery gathered momentum.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7410 will signal a resumption of the downtrend. A trade through .7599 will change the main trend to up.

The minor trend is also down. A trade through .7503 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is .7410 to .7503. The AUD/USD is currently trading on the weak side of its pivot at .7457.

On the downside, the support is the long-term Fibonacci level at .7379.

On the upside, resistance is the long-term 50% level at .7499, followed by short-term retracement levels at .7505 and .7527.

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Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the minor pivot at .7457.

Bearish Scenario

A sustained move under .7456 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor bottom at .7410. Taking out this level will indicate the selling is getting stronger with .7379 to .7372 the next target area.

Bullish Scenario

A sustained move over .7457 will signal the presence of buyers. If this move generates enough upside momentum then look for a potential surge into a resistance cluster at .7499, .7503 and .7505. This is followed by .7527. This level is a potential trigger point for an acceleration into .7593 to .7599.

For a look at all of today’s economic events, check out our economic calendar.
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