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James Hyerczyk
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AUD/USD

The Australian Dollar is trading nearly flat late in the session on Wednesday after giving back earlier gains. Apparently higher demand for stocks failed to impress the normally risk-seeking Aussie traders. The U.S. Dollar is lower against a basket of currencies, but off its low for the session and Treasury yields are nudging higher.

At 19:30 GMT, the AUD/USD is trading .7598, up 0.0001 or +0.01%.

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End of the month/quarter position-squaring could be behind the price action as well as preparation ahead of the long Easter holiday. Essentially, it’s the strength of the U.S. economic recovery and the relative success of its vaccination program that is making the U.S. Dollar a more attractive asset.

Early in the session, the Aussie edged higher as upbeat economic news combined with rising bond yields provided support. Aiding sentiment was surveys from China showing surprisingly upbeat activity in both manufacturing and services.

Australia data also showed a huge 21.6% increase in approvals to build new homes in February, far above forecasts of 5.0% and recouping all of January’s unexpected drop.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7563 will signal a resumption of the downtrend, while a move through .7849 changes the main trend to up.

The minor trend is also down. A trade through .7664 will change the minor trend to up. This will shift momentum to the upside.

The minor range is .7563 to .7664. The AUD/USD is straddling its pivot at .7614 late in the session.

The short-term range is .7849 to .7563. If the minor trend changes to up then look for the rally to possibly extend into its 50% level at .7706.

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Short-Term Outlook

The price action on Wednesday suggests the direction of the AUD/USD into the close will be determined by trader reaction to .7614.

Bearish Scenario

A sustained move under .7613 will indicate the presence of sellers. This could trigger a break into the main bottom at .7563. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over .7614 will signal the presence of buyers. This could trigger a surge into .7664. Taking out this level could extend the rally into .7706.

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