The Australian Dollar is trading sharply higher on Tuesday as investors continue to react to yesterday’s bullish revision of Westpac’s Reserve Bank of Australia (RBA) rate call. End-of-the-month position-squaring and a weaker U.S. Dollar ahead of tonight’s debate between President Donald Trump and Democratic hopeful Joe Biden is also giving the Aussie a boost. Also underpinning the trade are hopes of a new stimulus deal from the U.S. government.
At 12:57 GMT, the AUD/USD is trading .7125, up 0.0053 or +0.75%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through .7006 will signal a resumption of the downtrend. The main trend will change to up on a move through .7345.
The minor trend is up. The minor trend changed to up when buyers took out the minor top at .7087. This move shifted momentum to the upside.
The main range is .6777 to .6414. After consolidating for four trading sessions, the Aussie is finally breaking out of its retracement zone at .7096 to .7020.
The minor range is .7345 to .7006. Its 50% level at .7176 is the next upside target.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the main 50% level at .7096.
A sustained move over .7096 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor 50% level at .7176. Since the trend is down, sellers could come in on the initial test of this level.
Overtaking .7176 could trigger an acceleration to the upside.
A sustained move under .7096 will signal the presence of sellers. This would put the AUD/USD back inside the main retracement zone.