The Australian Dollar is trading lower early Wednesday as the euphoria created by yesterday’s RBA decision to hold rates steady appears to be wearing off. Traders are likely reacting to the quarterly GDP report that came in at 0.4%, below the 0.5% forecast.
The data showed the Australian economy grew 1.7% on a seasonally adjusted basis year-on-year in the September quarter, however, the rate of growth remained well below the long run average.
At 06:13 GMT, the AUD/USD is trading .6822, down 0.0026 or -0.38%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The two-day rally was just short-covering. A trade through .6930 will change the main trend to up. A move through .6754 will signal a resumption of the downtrend.
The main range is .7082 to .6671. Its retracement zone at .6877 to .6925 is resistance. It’s controlling the longer-term direction of the AUD/USD.
The intermediate range is .6671 to .6930. Its retracement zone at .6800 to .6770 is support.
The short-term range is .6930 to .6754. Its retracement zone at .6842 to .6863 is resistance. It stopped the rally at .6862 on Tuesday.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6822, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at .6842.
A sustained move under .6842 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the intermediate 50% level at .6800. The Aussie will continue to weaken under this level with .6770 the next potential downside target.
Overtaking and sustaining a rally over .6842 will signal the presence of buyers. This could create a labored rally with upside targets at .6862, .6863 and .6877.
The 50% level at .6877 is a potential trigger point for an acceleration to the upside with .6925 to .6930 the next potential upside targets.
This article was originally posted on FX Empire
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