AUD/USD Forex Technical Analysis – Major Top at .7484 is Trigger Point for Acceleration to Upside

The Australian Dollar is spiking higher on Wednesday as signs of progress in tackling the COVID-19 pandemic boosted risk appetite with the Chinese Yuan climbing to its highest level in 2-1/2 years.

Riskier currencies including the Aussie are leading gains against the struggling greenback in early London trading with U.S. stimulus plans boosting stock markets to record highs.

At 09:04 GMT, the AUD/USD is trading .7467, up 0.0057 or +0.77%.

 

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out .7454. The main trend will change to down when sellers take out .7339.

The minor trend is also up. A trade through .7372 will change the minor trend to down. This will also shift momentum to the downside.

Daily Swing Chart Technical Forecast

The early price action indicates we are in a risk-on, momentum driven trade on Wednesday. If this momentum is strong enough then look for buyers to take a run at the July 9, 2018 main top at .7484.

Taking out .7484 will reaffirm the uptrend and signal that the buying is getting stronger. This could trigger an acceleration to the upside since the daily chart indicates there is no true resistance until the June 6, 2018 main top at .7677.

Since this rally is momentum driven with no visible resistance, a bearish chart pattern is likely to be the first sign that the buying is getting weaker and the selling stronger. The best chart pattern is the closing price reversal top.

A close under .7410 will produce a closing price reversal top. Since the AUD/USD is trading .7467, this rally appears to be safe at this time.

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