The Australian dollar struggles to head early Wednesday, as investors waited for updated data on consumer prices in the United States. Meanwhile, dovish comments from the Reserve Bank of Australia (RBA) helped push 10-year yields to their lowest since February at 1.525%. Moreover, Wespac analysts continued to be surprised at the absence of a bullish movement in the Aussie given the rise in commodity prices.
At 05:23 GMT, the AUD / USD is trading at 0.7740, up 0.0003 or + 0.03%.
Volume remains below average, with most major institutions on the sidelines ahead of Thursday’s U.S. inflation report, with most expecting the Federal Reserve, which meets on June 15 and 16, to consider the rise in inflation as a transitory when it comes to reducing its policy.
RBA deputy governor Chris Kent on Wednesday downplayed inflation risks nationally and globally, noting that inflation expectations were only back to where they were a few years ago.
Technical analysis of the daily swing chart
The main trend is downward on the daily swing chart. A trade through .7774 will change the main trend upward. A move to 0.7646 will signal a resumption of the downtrend.
The primary range is 0.8007 to 0.7532. Its retracement area at 0.7770 to 0.7826 is resistance. This area has stopped several rallies in recent months.
The short-term range is 0.7532 to 0.7891. Its retracement area at 0.7711 to 0.7669 is a potential support. This area has stopped several failure attempts in recent months.
Technical forecasts of the daily swing chart
The direction of AUD / USD on Wednesday will likely be determined by traders’ reaction to the 50% main level at 0.7770.
A sustained move above 0.7770 will signal the presence of buyers. If that creates enough bullish momentum, look for buyers to break out the main high at 0.7774. This will change the main upward trend. Extending the rally to this level could lead to possible tests of the major highs at .7796 and .7814 as well as the main Fibonacci level at .7826. The latter is a potential trigger point for upward acceleration.
A sustained move below .7769 will indicate the presence of sellers. This could trigger a breakout of the short-term level of 50% to 0.7711. If this potential support does not hold, expect the sell to eventually extend to the short term Fibonacci level to 0.7769 short term.