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James Hyerczyk

The Australian Dollar is trading flat on Tuesday after finding support at a key technical level. Low volume is also influencing the trade with many of the major players sitting on the sidelines ahead of the U.S. bank holiday on Thursday.

Investors are worried about the possibility of an interest rate cut on December 3 after recent comments from Reserve Bank of Australia officials signaled policymakers would keep the door open to implement lower interest rates.

At 10:29 GMT, the AUD/USD is trading .6780, up 0.0003 or +0.03%.

In other news, RBA Governor Philip Lowe said just a short while ago that the Reserve Bank may create money to buy government bonds if it runs out of levers to boost the economy when it drops the official interest rates to 0.25%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6770 will signal a resumption of the downtrend after two weeks of sideways price action.

The main trend will change to up on a trade through .6930. This is highly unlikely, but due to the prolonged move down in terms of price and time, the market is ripe for a closing price reversal bottom.

The main range is .6671 to .6930. Its retracement zone at .6800 to .6770 is currently being tested. This zone is potential support. It is also controlling the near-term direction of the AUD/USD.

The short-term range is .6930 to .6770. Its retracement zone at .6850 to .6869 is resistance.


Daily Technical Forecast

Based on the early price action and the current price at .6780, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the support cluster at .6770 to .6769. This was formed by a Fibonacci level and an uptrending Gann angle.

Bullish Scenario

A sustained move over .6770 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the main 50% level at .6800. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6769 will signal the presence of sellers. This will put the AUD/USD on the weak side of an uptrending Gann angle.

If .6769 fails as support then look for the selling to possibly extend into the downtrending Gann angle at .6840. Crossing to the weak side of this angle will put the AUD/USD in a bearish position.

Side Notes

We’re looking for an acceleration to the downside on a trade through .6769, but we’d like to see a jump in selling volume on the move. Otherwise, it could fail.

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