The Australian Dollar continued to push higher late Wednesday after the Federal Reserve left interest rates unchanged and repeated a vow to do what it takes to shore up the economy that has been battered by business shutdowns due to the novel coronavirus.
Buyers took control of the Aussie Dollar early in the session as domestic inflation rose above expectations even though the prospect of higher interest rates remains a pipe dream due to the devastation of the coronavirus on the economy.
At 20:19 GMT, the AUD/USD is trading .6551, up 0.0058 or +0.89%.
Quarterly Consumer Inflation came in at 0.3%, higher than the 0.2% forecast, but below the previous read of 0.7%. Trimmed Mean Consumer Inflation was 0.5%, besting the 0.3% forecast.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. If the upside momentum continues then look for a near-term test of the March 9 top at .6685. A trade through .6254 will change the main trend to down.
Thursday will be the seventh day up from the last main bottom on April 21. This will put the AUD/USD inside the window of time for a potentially bearish closing price reversal top. This chart pattern won’t change the trend, but it could lead to a 2 to 3 day counter-trend break.
The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is support. This zone is also controlling the near-term direction of the market.
Wednesday marked the sixth straight higher close. Given this information, buyers are going to continue to drive prices higher with confidence. This would put the AUD/USD on pace to challenge .6685.
On the other hand, bearish traders also know that a lower close will break the pattern and indicate the buying is getting weak or the selling is getting stronger.
A higher-high, lower close, close below the opening and close below the mid-point of the session will be the first sign of a top. A follow-through move to the downside on Friday will confirm the chart pattern.
This article was originally posted on FX Empire
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