AUD/USD Forex Technical Analysis – No Major Resistance Until .7394

The Australian Dollar is trading nearly flat early Wednesday after hitting a multi-month high the previous session. The rally is being fueled by a plunge in the U.S. Dollar as it continues to lose its appeal as a safe-haven asset. Lower U.S. Treasury yields also helped support the rally as well as a poor outlook for the U.S. economy.

At 05:04 GMT, the AUD/USD is trading .7235, down 0.0010 or -0.13%.

Tuesday’s Reserve Bank of Australia (RBA) minutes also provided some support after policymakers said they would leave policy unchanged over the near-term. Furthermore, late last week, RBA Governor Philip Lowe called on the government to provide more fiscal support.

Later in the day at 18:00 GMT, the Fed will release the minutes from its late July meeting. Traders will be looking for clues as to the timing of any changes to monetary policy in the future.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Tuesday when buyers took out the last swing top at .7243. The main trend will change to down on a trade through the last main bottom at .7109.

The minor trend is also up. Taking out .7132 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is .7109 to .7265. Its 50% level at .7187 is potential support.

The short-term range is .6833 to .7265. If the main trend changes to down then look for the selling to extend into its retracement zone at .7049 to .6998.

Daily Swing Chart Technical Forecast

The daily chart indicates there is plenty of room to the upside over .7265 with the December 3, 2018 main top at .7394 the next major target.

The fundamentals are supportive. The RBA seems to be a little more confident in the economy and sees no reason to alter policy. Policymakers don’t like the high value of the Aussie, but Lowe said an intervention wouldn’t work. Furthermore, the RBA is against sub-zero rates.

It looks like the catalyst that could launch a rally into .7394 over the near-term is the weaker U.S. Dollar. A break under .7187 will be the first sign of weakness today.

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