Yahoo Finance AUD/USD Forex Technical Analysis – Trying to Establish Support Base at .6893 to .6860
The Australian Dollar is trading slightly better on Tuesday after recovering from an earlier loss. There were no economic releases from Australia so outside factors are likely behind the price action.
China’s Yuan climbed to its highest level since July on Tuesday, as the U.S. Treasury Department reversed its decision in August to designate China as a currency manipulator.
At 06:57 GMT, the AUD/USD is trading .6906, up 0.0002 or -0.03%.
Traders are also optimistic about future growth due to the signing of the trade deal between the United States and China on January 15. Additionally, S&P Global Ratings on Monday said it expects a modest increase in credit losses for larger Australian banks after damaging bushfires in the country. This may be easing pressure on the Reserve Bank to cut rates.
Finally, China’s dollar-denominated exports and imports were both higher in December, Reuters reported citing data from the General Administration of Customs.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since December 31. A trade through .6849 will change the main trend to down. The uptrend will resume when buyers take out the last swing top at .7032.
The main range is .6754 to .7032. Its retracement zone at .6893 to .6860 is currently being tested. Buyers are trying to establish support inside this zone.
The short-term range is .7032 to .6849. Its retracement zone at .6941 to .6962 is the next potential upside target.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the main 50% level at .6893.
Bullish Scenario
A sustained move over .6893 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible test of the minor top at .6920.
Taking out .6920 will shift momentum to the upside. This could trigger a rally into .6941 to .6962. Aggressive counter-trend sellers could come in on a test of this zone in an effort to form a secondary lower top. Taking out .6962, however, will indicate the buying is getting stronger.
Bearish Scenario
A sustained move under .6893 will signal the presence of sellers. The first minor target is a 50% level at .6885. If this level fails then look for the selling to possible extend into the main Fibonacci level at .6860. This is followed by the main bottom at .6849. Taking out this bottom will change the main trend to down.
This article was originally posted on FX Empire
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