The Australian Dollar is trading lower on Wednesday as concerns over the impact of new coronavirus cases on the global recovery are weighing on demand for commodity-linked currencies. The Aussie is also tracking losses in crude oil and copper as COVID-19 infections rise globally. Traders are also showing little reaction to higher-than-expected Australian retail sales data.
At 05:07 GMT, the AUD/USD is trading .7707, down 0.00018 or -0.23%.
Australian retail sales surpassed expectations in March in a positive sign for the economy as soaring house prices and a surge in employment boosted consumer confidence and spending. The data supports the view that Australia’s A$2 trillion economy is on a solid footing though the Reserve Bank of Australia (RBA) will wait for inflationary pressures to emerge before considering interest rate hikes.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum may be shifting to the downside with the confirmation of yesterday’s closing price reversal top.
A trade through .7816 will negate the closing price reversal top. A move through the next main top at .7849 will reaffirm the uptrend. The main trend will change to down on a move through .7586.
The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This zone stopped the buying at .7816 on Tuesday.
The short-term range is .7532 to .7816. Its retracement zone at .7674 to .7640 is the next downside target and potential support area. Since the main trend is up, buyers are likely to come in on a test of this area.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7709.
A sustained move under .7709 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into .7674 to .7640. Look for buyers on the first test of this area. If .7640 fails then look for an acceleration into the main bottom at .7586.
A sustained move over .7709 will signal the presence of buyers. If this creates enough upside momentum then look for a retest of the main retracement zone at .7770 to .7826.
For a look at all of today’s economic events, check out our economic calendar.