The Australian Dollar is trading lower early Wednesday, following the release of a speech by Reserve Bank of Australia Governor Philip Low at 01:30 GMT and President Donald Trump’s State of the Union address at 02:00 GMT.
Lowe’s speech is titled “The Year Ahead”. Yesterday, the RBA kept its benchmark interest rate on hold, while offering slight downgrade of its outlook for the economy. Lowe is likely to address the increased downside risks to both the global and domestic economy. He is also expected to be less confident about the economy than he was just a few months ago. Both issues are likely to produce a bearish result.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At 0133 GMT, the AUD/USD is trading .7193, down 0.0044 or -0.60%.” data-reactid=”13″>At 0133 GMT, the AUD/USD is trading .7193, down 0.0044 or -0.60%.
During Trump’s speech, Aussie investors will be looking for comments on U.S.-China relations. Trump is expected to be upbeat and optimistic about a trade deal. This would be supportive for the Australian Dollar since it is often referred to as a proxy for the Chinese economy.
Daily Technical Analysis
The main trend is up according to the daily swing, however, momentum is trending lower. A trade through .7296 will signal a resumption of the uptrend. A move through .7076 will change the main trend to down.
The minor trend is down. It changed to down earlier in the session when sellers took out .7194. This shifted momentum to the downside. The new minor top is .7265. A trade through this top will change the minor trend to up.
The short-term range is .7076 to .7296. Its 50% level or pivot at .7186 is the first downside target. Since the main trend is up, buyers could come in on the first test of this level.
The main range is .7394 to .6764. Its retracement zone is .7153 to .7079 is the major downside target. This zone is controlling the longer-term direction of the Forex pair.
Daily Technical Forecast
Based on the early price action and the current price at .7193, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the short-term 50% level at .7186.
A sustained move over .7186 will indicate the return of buyers. If this can generate enough upside momentum then look for a retest of the uptrending Gann angle at .7244. Overcoming this angle will indicate the buying is getting stronger. This could lead to a test of the downtrending Gann angle at .7282. This is followed by the main top at .7296.
A sustained move under .7186 will signal the presence of sellers. This could trigger a spike into the major Fibonacci level at .7153. Watch for a technical bounce on the first test of this level.
The Fib level at .7153 is a potential trigger point for an acceleration to the downside with the major 50% level at .7079 the next target, followed by the main bottom at .7076.
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”39″>This article was originally posted on FX Empire
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