AUD/USD Forex Technical Analysis – Sustained Move Under .7769 Could Drive Aussie into .7674 – .7640

The Australian Dollar is trading lower on Wednesday after a government report showed consumer prices rose by much less than expected last quarter while core inflation increased by the weakest pace on record, signaling monetary policy could stay super loose for a long time to come.

At 04:50 GMT, the AUD/USD is trading .7744, down 0.0024 or -0.31%.

The consumer price index rose 0.6% in the March quarter form the prior three-month period, undershooting market forecasts for a 0.9% rise.

The annual pace picked up to 1.1%, from 0.9%, but again missed forecasts of 1.4%, and remained far below the Reserve Bank of Australia’s (RBA) target band of 2-3%.

A key measure of trimmed mean inflation rose a surprisingly low 0.3% in the quarter, while the annual pace, at 1.1%, was the weakest on record.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7816 will signal a resumption of the uptrend. A trade through .7691 will change the main trend to down.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This zone stopped the buying at .7815 and .7816 recently.

The short-term range is .7532 to .7816. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at .7674 to .7640.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the main 50% level at .7770.

Bearish Scenario

A sustained move under .7769 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at .7691, followed by the short-term retracement zone at .7674 to .7640.

Bullish Scenario

A sustained move over .7770 will signal the signal the presence of buyers. This could lead to a labored rally with potential resistance lined up at .7815, .7816, .7826 and .7849. The latter is a potential trigger point for an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.