The Australian Dollar is inching higher early Wednesday as traders continue to respond to yesterday’s dramatic reversal to the upside. The strong recovery was likely fueled by a drop in the U.S. Dollar as traders digested less bearish comments from the U.S. monetary officials along with a more dire prognosis from the country’s top medical expert on the spread of the novel coronavirus.
At 02:55 GMT, the AUD/USD is trading .6910, up 0.0005 or +0.07%.
The dollar gained against the Japanese Yen, but retreated versus the commodity currencies such as the Australian, New Zealand and Canadian Dollars after Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, in testimony before the U.S. House of Representatives Financial Services Committee on Tuesday, suggested a willingness to do more for the U.S. economy as it battles the enormous fallout from the virus outbreak.
On the other hand, Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, in remarks to a Senate committee on Tuesday warned of the risks of a surge in cases and said the country should not bank on the availability of a safe and effective COVID-19 vaccine.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .6977 will signal a resumption of the uptrend. A move through .6833 will change the main trend to down.
The minor trend is up. The minor trend changed to up on Tuesday. The new minor bottom is .6833.
The short-term range is .7065 to .6800. Its 50% level or pivot at .6933 is controlling the near-term direction of the AUD/USD.
The intermediate range is .6506 to .7065. Its 50% level or pivot at .6785 is support.
The main range is .6402 to .7065. Its retracement zone at .6733 to .6655 is a major support zone.
Daily Swing Chart Technical Forecast
Based on the near-term price action, the direction of the AUD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the pivot at .6933.
The inability to overcome or sustain a rally over .6933 will indicate the presence of sellers. This could lead to a retest of .6833, followed by a series of levels at .6811, .6785 and .6777. We’re looking for a labored break at first. The AUD/USD is not likely to accelerate to the downside until .6733 is taken out.
A sustained move over .6933 will indicate the buying is getting stronger. This could trigger a surge into a pair of main tops at .6975 and .6977. The latter is the trigger point for an acceleration into the main top at .7065.
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