The Australian Dollar is trading lower on Thursday despite the demand for risky assets. Investors don’t seem to care about the rising stock market or the easing tensions between the United States and Iran. They’re worried about the impact of the country’s wild fires on the economy and whether the Reserve Bank of Australia (RBA) will have to cut interest rates in order to prevent the devastation from triggering a recession.
At 16:11 GMT, the AUD/USD is trading .6852, down 0.0016 or -0.22%.
A strong U.S. labor market is also driving up U.S. Treasury yields. This is helping to boost the U.S. Dollar, putting further pressure on the Australian Dollar.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through .6838 will change the main trend to down. A move through .7043 will reaffirm the uptrend.
The main range is .6671 to .7043. The AUD/USD is currently trading on the weak side of its retracement zone at .6877 to .6941, making this area resistance.
Additional resistance is a short-term retracement zone at .6864 to .6898.
Daily Technical Forecast
Based on the early price action and the current price at .6852, the direction of the AUD/USD the rest of the session on Thursday is likely to be determined by trader reaction to the uptrending Gann angle at .6849 and the short-term Fibonacci level at .6864.
A sustained move under .6849 will indicate the presence of sellers. The next target is the main bottom at .6838.
Taking out .6838 will change the main trend to down. This could trigger a further break into the next uptrending Gann angle at .6827 and the next main bottom at .6800.
Holding .6849 will indicate that the selling is slowing, or the buying is increasing. Overcoming .6864 will indicate an intraday shift in momentum. This could trigger a move into .6877. Overtaking this level could spike the AUD/USD into .6898.
This article was originally posted on FX Empire