AUD/USD Forex Technical Analysis – Trader Reaction to .7542 Sets the Tone

The Australian Dollar is trading nearly flat against the U.S. Dollar early Wednesday as traders await key monetary announcements from the U.S. Federal Reserve at 17:00 GMT and ahead of key Australian employment data to be released early Thursday.

Underpinning the Aussie is an improving outlook for the economy, increasing demand for risky assets due to optimism over the rollout of the COVID-19 vaccines, expectations of more fiscal stimulus from the U.S. government and a weaker U.S. Dollar.

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At 03:39 GMT, the AUD/USD is trading .7559, up 0.0002 or +0.03%.

Earlier today, the preliminary PMI results for Australia showed a pick-up in growth of private sector output during December, reflecting the loosening of COVID-19 restrictions, with faster expansions evident in both the manufacturing and services economies.

Australian Flash Manufacturing PMI came in at 56.0, up from 55.8 and Australian Flash Services PMI rose to 57.4 from 55.1.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7578 will signal a resumption of the uptrend. The main trend changes to down on a move through .7339.

The minor trend is also up. The minor trend will change to down on a move through .7372. Taking out .7572 will turn .7507 into a new minor bottom.

The first minor range is .7578 to .7507. Its pivot at .7542 is providing support early Wednesday.

The second minor range is .7372 to .7578. Its 50% level at .7475 is potential support.

The short-term range is .7339 to .7578. Its pivot at .7458 is another potential support level.

[fx-article-ad]Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD is likely to be determined by trader reaction to the pivot at .7542.

Bullish Scenario

A sustained move over .7542 will indicate the presence of buyers. If this move creates enough upside momentum then look for a breakout over .7578. This will reaffirm the uptrend and put the AUD/USD on track for a rally into the June 6, 2018 main top at .7677.

Bearish Scenario

A sustained move under .7542 will signal the presence of sellers. This could trigger a break into .7507, followed by a pair of 50% levels at .7475 and .7458.

For a look at all of todays economic events, check out our economic calendar.