The Australian Dollar is trading lower on Tuesday, while posting an inside range. The chart pattern suggests investor indecision and impending volatility. We could also be looking at a transition in momentum after a steep rally.
Underpinning the Aussie is optimism over the ongoing trade talks between the United States and China. Capping gains, however, and exerting some downside pressure is the report showing a 4.4 percent drop in the Australian Trade Balance.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At 0505 GMT, the AUD/USD is trading .7127, down 0.0021 or -0.30%.” data-reactid=”13″>At 0505 GMT, the AUD/USD is trading .7127, down 0.0021 or -0.30%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will change to up on a trade through .7247. A move through .6764 will signal a resumption of the downtrend.
The minor trend is up. This shifted the momentum to up.
The main range is .7394 to .6764. The market is currently trading inside its retracement zone at .7079 to .7153. Trader reaction to this zone should determine the near-term direction of the AUD/USD.
The minor range is .7247 to .6764. Its retracement zone at .7062 to .7006 is support.
The key support area to watch is the support cluster at .7079 to .7062.
Daily Technical Forecast
Based on the early price action and the current price at .7127, the direction of the AUD/USD today is likely to be determined by trader reaction to the resistance cluster at .7153 to .7154.
A sustained move over .7154 will indicate the presence of buyers. This is a potential trigger point for an acceleration to the upside with the next target the main top at .7247.
A sustained move under .7153 will signal the presence of sellers. The daily chart is wide open to the downside with the next target zone coming in at .7079 to .7063.
<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=”37″>This article was originally posted on FX Empire
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