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James Hyerczyk

The Australian Dollar is trading mixed to slightly better on Wednesday after soft Australian inflation figures supported expectations of near-term policy easing. That news comes as Australia’s second largest city, Melbourne, re-opens after months of lockdown have driven new cases down into single figures and left the entire country open for business.

At 08:09 GMT, the AUD/USD is trading .7134, up 0.0007 or +0.10%.

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On Wednesday, a report showed consumer price inflation ticked up to just 0.7% in the third quarter, far below the RBA’s target band of 2-3%. Core inflation was not much higher at an annual 1.2% and the central bank itself has forecast only a slight pick up to around 1.5% by the middle of 2022.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7021 will signal a resumption of the downtrend. The main trend will change to up on a move through the last main top at .7243.

The short-term range is .7243 to .7021. Its retracement zone at .7132 to .7158 has been providing resistance the last four session.

Near-term support is a major 50% level at .7095, followed by a minor retracement zone at .7090 to .7073.

Near-term resistance is a resistance cluster at .7158. This is also a potential trigger point for an acceleration to the upside with .7210 the next likely target.


Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at .7132.

Bearish Scenario

A sustained move under .7132 will indicate the presence of sellers. If this creates enough downside momentum then look for the break to extend into a pair of 50% levels at .7095 and .7090. If the latter fails then look for the selling to possibly extend into .7073.

Bullish Scenario

Overcoming .7132 will signal the presence of buyers. This could lead to a retest of the resistance cluster at .7158. This price is also a trigger point for an acceleration to the upside with the next major target zone .7210 to .7258. Inside this zone is a main top at .7243.

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

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