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James Hyerczyk
AUD/USD

The Australian Dollar is trading higher late in the session on Wednesday, recovering from early session weakness, amid rising hopes for further U.S. fiscal stimulus. Upbeat economic data also weighed on the safe-haven U.S. Dollar as sentiment shifted from risk-off to risk-on.

Treasury Secretary Steven Mnuchin fueled the rally in the higher-yielding commodity-linked Aussie Dollar when he struck an optimistic tone about reaching a coronavirus aid deal on Wednesday after the stalemate in Washington dragged on for weeks.

The U.S. Dollar was also pressured by favorable data. ADP’s monthly private-sector jobs count showed growth of 749,000 in September, ahead of the 600,000 expected from a Dow Jones economist survey. Additionally, pending home sales soared 8.8% in August, marking its highest pace on record, according to the National Association of Realtors survey.

At 16:54 GMT, the AUD/USD is trading .7171, up 0.0040 or +0.57%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through .7006 will signal a resumption of the downtrend. The main trend will change to up on a move through .7345.

The minor trend is up. This is controlling the upside momentum.

The main range is .6777 to .7414. Its retracement zone at .7095 to .7020 is a key support zone. This rally started after the Aussie formed a support base inside this zone.

The minor range is .7345 to .7006. The Aussie is currently testing its 50% level at .7176.

The short-term range is .7414 to .7006. Its retracement zone at .7210 to .7258 is the primary upside target. Trader reaction to this zone will determine the near-term direction of the AUD/USD.

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Short-Term Outlook

The AUD/USD reached its first objective at .7176. If sellers come in then we could see a short-term setback to at least .7095. If buyers extend the counter-trend rally then look for a test of the short-term 50% level at .7210.

Over the near-term, the direction of the AUD/USD will be determined by trader reaction to the short-term retracement zone at .7210 to .7258. Aggressive counter-trend sellers are going to try to form a secondary lower top. Buyers are going to try to drive through the top of the zone in an effort to change the main trend to up.

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

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