The Australian Dollar closed higher on Tuesday after a report said that the U.S. and China were trying to restart negotiations to defuse a trade war. This news fueled a rally in the Chinese Yuan against the U.S. Dollar.
In other news, data showed U.S. consumer spending increased solidly in June, while inflation rose moderately. Other data showed employers boosting benefits for workers in the second quarter, but wage growth slowed.
Early Wednesday, investors will get the opportunity to react to the AIG Manufacturing Index.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7465 will signal a resumption of the uptrend with .7484 the next target. The main trend will change to down on a move through .7318.
The minor trend is also up. A trade through .7370 will change the minor trend to down and shift momentum to the downside.
The main range is .7310 to .7484. Its 50% level or pivot is .7397. Trading above this level is helping to give the market an upside bias.
The intermediate range is .7318 to .7465. Its retracement zone at .7391 to .7374 is support.
The short-term range is .7465 to .7370. The AUD/USD is currently testing its retracement zone at .7417 to .7429. Sellers are trying to form a secondary lower top. Buyers are trying to drive the Forex pair through this zone in an effort to make .7370 a new main bottom.
Daily Swing Chart Technical Forecast
Based on Tuesday’s close at .7428, the direction of the AUD/USD on Wednesday will be determined by trader reaction to the short-term Fibonacci level at .7429.
A sustained move under .7429 will indicate the presence of sellers. This could lead to a quick test of the 50% level at .7417.
Taking out .7417 could trigger an acceleration into a pair of 50% levels at .7397 and .7391. If .7391 fails as support then look for the selling to extend into .7374 to .7370.
A sustained move over .7429 will signal the presence of buyers. If this move generates enough upside momentum then look for buyers to make a run at .7465.