AUD/USD Forex Technical Analysis – Needs to Hold .6846 to Sustain Upside Momentum

The Australian Dollar is trading sharply higher for a second session on Tuesday, boosted by the risk-on tone in the market, which rose broadly on Monday after the European Union granted a third delay to the U.K.’s departure following a request from Prime Minister Boris Johnson and MPs in parliament.

Additionally, global risks have been showing signs of subsiding with the de-escalation of U.S.-China trade tensions. On Monday, President Donald Trump said a trade agreement looked to be ahead of schedule, without detailing the timing. Furthermore, the United States also said it was studying whether to extend tariff suspensions due to expire in December.

At 07:51 GMT, the AUD/USD is trading .6856, up 0.0017 or +0.25%.

In other news, Reserve Bank of Australia (RBA) chief Philip Lowe reiterated on Tuesday that he’s prepared to ease policy further if needed, but again pushed back against the idea of interest rates turning negative in his economy.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6883 will signal a resumption of the uptrend after a three-day shift in momentum to down following a closing price reversal top on October 22. The main trend will change to down on a move through .6809.

The minor range is .6883 to .6809. Its 50% level or pivot at .6846 is very important. Trading on the strong side of this level will help generate an upside bias. Falling below it will indicate the presence of sellers.

The main range is .6895 to .6671. Its retracement zone at .6809 to .6783 is support. The short-term range is .6724 to .6883. Its 50% level at .6803 is additional support.

Daily Technical Forecast

Based on the early price action and the current price at .6856, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the pivot at .6846.

Bullish Scenario

A sustained move over .6846 will indicate the presence of buyers. The first target is a downtrending Gann angle at .6858. Overtaking this angle will indicate the buying is getting stronger. This could trigger a surge into a pair of downtrending Gann angles at .6871 and .6854. This are the last two potential resistance angles before the .6883 main top.

Bearish Scenario

A sustained move under .6846 will signal the presence of sellers. This could trigger a break into a downtrending Gann angle at .6833. Crossing to the weak side of this angle will mean the selling pressure is getting stronger. This could lead to a further break into and uptrending Gann angle at .6814, followed by the main bottom at .6809.