AUD/USD Forex Technical Analysis – In Position to Close on Strong Side of Long-Term 50% Level at .7499

The Australian Dollar is trading higher late in the session on Wednesday after regaining its composure following an intraday setback. The Aussie is being primarily supported by surprisingly strong domestic inflation data.

Meanwhile, the U.S. Dollar posted a mixed performance as Treasury yields fell sharply and as traders positioned themselves ahead of next week’s U.S. Federal Reserve monetary policy decision.

At 19:13 GMT, the AUD/USD is trading .7517, up 0.0015 or +0.20%.

Overnight data showed that Australian core inflation sped to a six-year high in September, surprising the market. The data prompted a spike in short-term yields.

In the U.S., the 10-year U.S. Treasury yield fell sharply on Wednesday, giving back some of its recent gains as investors monitored policy changes at global central banks. The drop in rates helped the Aussie rebound throughout the session.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending lower. A trade through .7547 will signal a resumption of the uptrend. The main trend will change to down on a move through .7454.

Late in the session on Wednesday, the AUD/USD is trading on the strong side of a long-term 50% level at .7499, making it support. Additional support is a pair of 50% levels at .7463 and .7435.

If .7435 is taken out by strong selling pressure, the AUD/USD could collapse into the long-term Fibonacci level at .7379.

Short-Term Outlook

The direction of the AUD/USD into the close on Wednesday and early Thursday will be determined by trader reaction to the 50% level at .7499.

Bullish Scenario

A sustained move over .7499 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the main top at .7547.

Overtaking .7547 will indicate the buying is getting stronger. This could trigger an acceleration into the July 6 main top at .7599, followed closely by the June 25 main top at .7617.

Bearish Scenario

A sustained move under .7499 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into .7463, followed closely by .7454.

Taking out .7454 will change the main trend to down, but don’t expect an acceleration to the downside unless sellers can take out .7435 with conviction.