The Australian Dollar is inching lower early Tuesday following the release of a couple of economic reports and fresh news from the Reserve Bank of Australia.
Earlier in the session, Australia reported that its Current Account rose 8.4 Billion versus an estimate of 6.3 Billion. The previous month was also revised higher to 1.7 Billion.
Quarterly Company Operating profits rose 1.1%. This is against a forecast of 0.0% and the previous read of -3.5%.
At 04:58 GMT, the AUD/USD is trading .6790, down 0.0008 or -0.11%.
On Monday, riskier currencies like the Australian Dollar rallied as investors looked to positive signs from China’s post-coronavirus economic recovery and hopes for an easing in Sino-U.S. tensions.
The Aussie was the standout gainer and is now up more than 20% from March lows. It gained steadily through May as the country brought coronavirus under control, while the price of iron ore – Australia’s top export – soared to record highs.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Monday when buyers drove through the March 9 top at .6685.
A trade through Monday’s high at .6803 earlier on Tuesday reaffirmed the uptrend. The main trend will change to down on a trade through .6402.
The minor trend is also up. The minor trend will change to down on a move through .6506. This will also shift momentum to the downside.
The minor range is .6506 to .6814. Its 50% level at .6660 is the nearest support.
Daily Swing Chart Technical Forecast
The daily chart indicates there is plenty of room to the upside with the July 19, 2019 main top the next major upside target.
However, due to the prolonged move up in terms of price and time, the AUD/USD is currently inside the window of time for a potentially bearish closing price reversal top. This chart pattern won’t change the trend to down, but it could trigger the start of a 2 to 3 day counter-trend break.
Based on the early price action, and the current price at .6790, the direction of the AUD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to yesterday’s close at .6797.
A sustained move over .6797 will indicate the presence of buyers. Taking out the intraday high at .6814 will indicate the buying is getting stronger. There is plenty of room to the upside so we could see an acceleration with .7082 the next major upside target.
A sustained move under .6797 will signal the presence of sellers. A close under this level will form a closing price reversal top. If confirmed then look for the start of a 2 to 3 day break with .6660 the next likely downside target.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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