The Australian Dollar is trading lower on Tuesday, continuing the price slide that began late last week. The financial markets reopened in Australia after the long Easter holiday with investors worried about a potential rate cut by the Reserve Bank sooner later this year. Some of the selling pressure is being attributed to position-squaring ahead of Wednesday’s release of the first quarter consumer inflation report.
At 06:43 GMT, the AUD/USD is trading .7117, down 0.0018 or -0.26%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, the Forex pair is in a position to shift momentum to the downside.
The minor trend is also up. A trade through .7109 will change the minor trend to down. This will shift momentum to the downside.
The AUD/USD is currently trading inside a major retracement zone at .7079 to .7153. This zone is controlling the longer-term direction of the Forex pair.
The short-term range is .7052 to .7206. The AUD/USD is currently testing its retracement zone at .7129 to .7111.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD is likely to be determined by trader reaction to the price cluster at .7126, .7127 and .7129.
A sustained move over .7129 will indicate the presence of buyers. If this move can create enough upside momentum then look for a potential extension of the rally into .7153.
A sustained move under .7126 will signal the presence of sellers. The first downside target is .7111, followed by the minor bottom at .7109.
The minor bottom at .7109 is the trigger point for an acceleration to the downside with the first target angle coming in at .7090. This is followed by the major 50% level at .7079 and another uptrending Gann angle at .7071. This is the last potential support angle before the .7052 main bottom.
This article was originally posted on FX Empire
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