AUD/USD Forex Technical Analysis – Near-Term Bullish as Long as .6921 Holds as Support
The U.S. Dollar is on the defensive again early Wednesday, particularly against other growth-leveraged currencies such as the Australian Dollar, following an uptick in U.S. inflation on Tuesday and news of progress in vaccine development, which is helping to drive up demand for higher-yielding assets.
The greenback is extending losses on Wednesday after the U.S. government reported the previous session that consumer inflation rebounded 0.6% month-on-month, the most in nearly eight years, in June, easing worries about deflationary pressures from the economic downturn.
At 09:52 GMT, the AUD/USD is trading .6999, up 0.0024 or +0.34%.
Further boosting investors’ risk appetite for the Aussie, Moderna Inc’s experimental vaccine for COVID-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study, U.S. researchers reported on Tuesday.
Helping to limit gains was a report from Westpac that showed a drop in consumer sentiment that reversed all of last month’s impressive gain, taking the index back to the weak levels seen in May but still leaving it 16% above April’s extreme low of 75.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the minor top at .7001. A trade through .6833 will change the main trend to down.
The minor trend also reversed to the upside following a one-day setback. The minor trend will change to down on a trade through .6921. This will also shift momentum to the downside.
The short-term range is .7065 to .6777. Its 50% level at .6921 is support. This level stopped the selling on Tuesday.
Daily Swing Chart Technical Forecast
We’d like to see the AUD/USD sustain a rally over .7001. If this move creates enough upside momentum then look for a possible surge into the main tops at .7065 and .7082 over the near-term.
Falling back under .7001 will be the first sign of weakness, while a close under .6975 will form a potentially bearish closing price reversal top. Taking out the price cluster at .6921, formed by the 50% level and minor bottom at .6921 will shift momentum to the downside.