AUD/USD Forex Technical Analysis – Main Trend Changed to Down on Tuesday
The Australian Dollar is edging higher early Wednesday on profit-taking in reaction to a rebound in crude oil prices. Despite the early recovery, the near-term outlook is bearish for the Australian Dollar so we expect the selling pressure to resume before the end of the week.
Australia’s central bank governor, Philip Lowe, said on Tuesday that the country is likely to experience its biggest contraction in output since the 1930’s, and that a quick return to business as usual should not be expected. Those are not bullish words.
At 05:22 GMT, the AUD/USD is trading .6301, up 0.0017 or +0.28%.
The plunge in commodity and equity prices is a signal global investors are looking for prolonged weakness, even after the lockdowns are eased.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down on Tuesday when sellers took out the last swing bottom at .6265. The new swing tops are .6398 and .6445. Buyers would have to take out these levels to change the main trend to up.
The main range is .6685 to .5510. Our first downside objective is the retracement zone at .6236 to .6097.
The intermediate range is .5510 to .6445. Its retracement zone at .5977 to .5867 is the second downside target area.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6301, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at .6236.
A sustained move over .6236 will indicate the presence of counter-trend buyers. If this move can create enough upside momentum then look for a possible retest of the two main tops at .6398 and .6445.
A sustained move under .6236 will signal the presence of sellers. This could trigger an acceleration to the downside into the main 50% level at .6097.