The Australian Dollar is trading higher on Wednesday as optimism that a US-China trade deal could be in the works boosted risk sentiment. The Aussie jumped earlier in the session after the talks were extended for an unscheduled third day on the hopes that the world’s largest economies can strike a trade deal. The meetings wrapped up after a “good few days,” a U.S. official said.
At 0806 GMT, the AUD/USD is trading .7155, up 0.0015 or +0.22%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the dramatic closing price reversal bottom on January 3.
The main trend will change to up on a trade through .7247. A move through .6764 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The main range is .7394 to .6764. The AUD/USD is currently testing the upper limit of its trading range at .7079 to .7153. This zone is controlling the near-term direction of the Forex pair.
The short-term range is .7247 to .6764. Holding above its retracement zone at .7062 to .7005 will help sustain the upside bias. These two levels are support.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to the Fibonacci level at .7153 and the downtrending Gann angle at .7144.
A sustained move over .7153 will indicate the presence of buyers. If this move generates enough upside momentum then look for a test of the main top at .7247. Taking out this level will change the main trend to up and likely trigger a further rally into the downtrending Gann angle at .7269.
The inability to hold above .7153 will be the first sign of sellers. Crossing to the weak side of the downtrending Gann angle at .7144 will indicate the selling is getting stronger. This could drive the AUD/USD into the uptrending Gann angle at .7084, followed closely by a 50% level at .7079.
Look for volatility at 1900 GMT with the release of the December Federal Reserve meeting minutes.
This article was originally posted on FX Empire
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