AUD/USD Forex Technical Analysis – Trader Reaction to .7373 Sets the Tone on Wednesday

The risk sensitive Australian Dollar is trading nearly flat early Wednesday, reflecting similar price action in U.S. equity futures. The price action this week suggests buyers are facing strong selling pressure from traders defending the September top at .7414.

Investors are showing little reaction to yesterday’s decision by the Reserve Bank of Australia (RBA) to hold its benchmark rate steady because this move was largely priced into the market. Today’s reported rise in Australian GDP also failed to spur another buying spree, indicating that the news came as no surprise.

At 07:30 GMT, the AUD/USD is trading .7376, up 0.0004 or +0.06%.

The Aussie firmed after the release of upbeat data that showed Australia’s economy rebounded more strongly than expected in the third quarter, but did not breakout to the upside. RBA Governor Philip Lowe called the figures “good” news, while noting there was a long way yet to full recovery.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7407 will signal a resumption of the uptrend. Taking out .7414 will reaffirm the uptrend. The main trend changes to down on a move through .7255.

The minor trend is down. It changed to down when sellers took out .7353 on Monday. This move shifted momentum to the downside.

The minor range is .7407 to .7339. Its 50% level at .7373 is acting like a pivot this week.

The short-term range is .7255 to .7407. Its retracement zone at .7331 to .7313 is the next potential support area. Since the main trend is up, buyers could come in on a test of this area.

The main support is .7252 to .7202.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the 50% level at .7373.

Bullish Scenario

A sustained move over .7373 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible drive into .7407 and .7414. Taking out .7414 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under .7373 will signal the presence of sellers. This could create the downside momentum needed to challenge a low at .7339, followed by a short-term retracement zone at .7331 to .7313.

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