AUD/USD Forex Technical Analysis – Strengthens Over .6930, Weakens Under .6876Based on the early price action and the current price at .6908, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at .6876.
The Australian Dollar is trading higher on Tuesday, recovering from early session weakness, after Reserve Bank of Australia policymakers decided to hold policy steady at 0.75%, as expected, while upgrading forward-guidance.
The final paragraph of the RBA’s monetary policy statement is steering Aussie Dollar prices higher. In it, the RBA said, “The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range.” Traders interpreted this to mean that the central bank’s easing bias may no longer be warranted. Like the U.S. Federal Reserve, however, the RBA did leave the door open to ease further if needed.
At 07:01 GMT, the AUD/USD is trading .6908, up 0.0023 or +0.33%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at .6930 on October 31.
A trade through .6930 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through .6809.
The main range is .7082 to .6671. Its retracement zone at .6876 to .6925 is currently being tested. This zone is controlling the near-term direction of the AUD/USD.
The short-term range is .6809 to .6930. Its retracement zone is .6870 to .6855. This zone is the next downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6908, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at .6876.
A sustained move over .6876 will indicate the presence of buyers. If this generates enough upside momentum then look for a rally into the Fibonacci level at .6925 and the main top at .6930.
Taking out .6930 will reaffirm the uptrend. This could trigger an acceleration to the upside. The daily chart indicates there is no visible resistance until the July 19 main top at .7082.
A sustained move under .6876 will signal the presence of sellers. The first target is the short-term retracement zone at .6870 to .6855. Look for buyers on the first test of this area. Further downside is expected if .6855 fails as support.