AUD/USD Forex Technical Analysis – Trader Reaction to .7551 Sets the Tone

The Australian Dollar is edging higher on Wednesday on light volume as traders prepare for a two-day bank holiday. The price action has been choppy all week as uncertainty about U.S. fiscal stimulus, Brexit and the pandemic recovery drove investors in and out of riskier bets.

At 07:20 GMT, the AUD/USD is trading .7565, up 0.0039 or +0.51%.

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Earlier in the session, President Trump threatened not to approve the stimulus bill passed by the U.S. Congress on Tuesday, saying it should be amended to increase the amount in the stimulus checks, though this has had little impact on the Aussie so.

Although Trump really cant do anything at this time, President-elect Biden is widely expected to push for an even bigger fiscal stimulus package early next year. This should keep the pressure on the U.S. Dollar while underpinning the Aussie.

[fx-image src=/2020/12/Daily-AUDUSD-10.jpg data-zoom-target=https://responsive.fxempire.com/cdn/n/n/_fxempire_/2020/12/Daily-AUDUSD-10.jpg originalWidth=1920 ratio=1.99]Daily AUD/USDDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A move through .7640 will signal a resumption of the uptrend, while a trade through .7255 will change the main trend to down.

The minor trend is down. It turned down on Monday, shifting momentum to the downside. A trade through .7462 will indicate the selling is getting stronger, while a move through .7640 changes the minor trend to up.

The first minor range is .7640 to .7462. The AUD/USD is currently straddling its 50% level or pivot at .7551.

The second minor range is .7339 to .7649. Its 50% level at .7489 is potential support.

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

The early price action suggests the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7551.

Bullish Scenario

A sustained move over .7551 will indicate the presence of buyers. If this move can generate enough upside momentum then we could see a retest of .7640. However, due to the low volume this week, we may not see the move.

Bearish Scenario

A sustained move under .7551 will signal the presence of sellers. This could trigger a retest of .7489, followed by this weeks low at .7462.

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