The Australian Dollar is inching higher shortly before the release of the Reserve Bank of New Zealand interest rate and monetary policy decisions. Although the RBNZ is expected to be dovish, this news may have already been priced into the currency.
The primary focus for investors has shifted to U.S.-Chinese trade relations, which may have taken an optimistic turn on Tuesday. Increased demand for commodity-currencies also underpinned the Aussie after the U.S. Dollar weakened following the news that a deal had been struck to avert a U.S. government shutdown.
At 00:06 GMT, the AUD/USD is trading .7101, up 0.0005 or +0.08%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum may be getting ready to shift to the upside. A trade through .7053 will signal a resumption of the downtrend.
The minor trend is also down. A trade through .7108 will change the minor trend to up. This will shift momentum to the upside.
The major retracement zone is .7079 to .7154. This zone is controlling the near-term direction of the AUD/USD.
The main range is .6764 to .7296. Its retracement zone at .7030 to .6967 is the primary downside target and support zone.
The short-term range is .7296 to .7053. Its retracement zone at .7175 to .7203 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this zone.
Daily AUD/USD (Short-Term)
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at .7116.
Taking out .7108 will change the minor trend to up, but a move through the downtrending Gann angle at .7116 is likely to trigger an acceleration to the upside. If this move creates enough upside momentum then look for the rally to possibly extend into the main Fibonacci level at .7154. This is followed by the short-term 50% level at .7175 and the short-term Fibonacci level at .7203.
The inability to take out .7116 with conviction and a sustained move under this angle will signal the presence of sellers. If this generates enough downside momentum then look for a retest of the major 50% level at .7079. If this level fails as support then look for the selling to possibly extend into the longer-term uptrending Gann angle at .7054. This forms a support cluster with the .7053 minor bottom.
Taking out .7053 will indicate the selling is getting stronger. This could trigger a further decline into .7030.