AUD/USD Forex Technical Analysis – Pivot at .7884 Controlling Price Action
The AUD/USD is trading lower early Wednesday. The market is following-through to the downside after a sell-off on Tuesday.
The U.S. Dollar is strengthening amid speculation that the White House and Republicans are making progress on tax legislation or on at least a repatriation plan that would involve infrastructure spending. The key story came from Politico which reported the Trump administration and key lawmakers had found common ground on how to approach tax reform.
The benchmark 10-year Treasury note yield rose more than 2 basis points to 2.2 percent, while the two-year yield advanced to trade at 1.329 percent. Rising Treasury yields helped make the U.S. Dollar a more attractive investment.
Technical Analysis
The main trend is down according to the daily swing chart. Also helping to give the market a downside bias is the closing price reversal top on August 17.
A trade through the closing price reversal top at .7962 will negate the chart pattern and signal a shift in momentum to the upside. A trade through .7807 will signal a resumption of the downtrend.
Forecast
Based on the current price at .7891, and the earlier price action, the direction of the AUD/USD is likely to be determined by trader reaction to the short-term 50% level at .7884.
A sustained move over .7884 will indicate the presence of counter-trend buyers. This could drive the Forex pair into the next retracement zone at .7936 to .7966. The closing price reversal top also falls inside this zone. Overtaking .7966 with strong volume could trigger an acceleration to the upside.
A sustained move under .7884 will signal the presence of sellers. The first target is the Fib level at .7866.
The Fib level at .7866 is the trigger point for an acceleration into the major 50% level at .7818, the main bottom at .7807 and eventually the major Fibonacci level at .7760.
This article was originally posted on FX Empire
