The Australian Dollar is trading lower on Thursday after potentially bearish news regarding the coronavirus took the wind out of this week’s rally, while dampening the optimism that the crisis had peaked.
The downdraft suggests traders have renewed concerns about the epidemic’s impact on Australia’s economy. Australia has extensive ties with China, with trade in commodities, tourism and education especially vulnerable to disruption from the virus.
At 07:52 GMT, the AUD/USD is trading .6721, down 0.0016 or -0.24%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6774 will change the main trend to up. A move through .6662 will signal a resumption of the downtrend.
The minor trend is also down. The earlier price action made .6750 a new minor bottom. Taking out this level will change the minor trend to up and shift momentum to the upside.
On the downside, there are two 50% levels controlling the direction of the AUD/USD. They come in at .6718 and .6706.
On the upside, the main target zone is .6798 to .6830. This is the first target area following a change in the main trend.
Daily Technical Forecast
Based on the early price action and the current price at .6721, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to a pair of Gann angles at .6744 and .6702.
The AUD/USD has formed a small triangle, capped by .6744 and floored by .6702. In between these angles are pair of Gann angles at .6722 and .6714 and a pair of 50% levels at .6718 to .6706. We think they are just noise.
A sustained move over .6744 will indicate the presence of buyers. This is followed by the minor top at .6750. This is a potential trigger point for an acceleration to the upside with the next target the main top at .6774.
A sustained move under .6702 will signal the presence of sellers. This could trigger a further break into the next uptrending Gann angle at .6682. This is the last potential support angle before the .6662 main bottom.
This article was originally posted on FX Empire
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