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AUD/USD Forex Technical Analysis – Counter-Trend Buyers Shifting Momentum to Upside

The Australian Dollar is trading a little better against the U.S. Dollar early Thursday, still recovering from early losses on Wednesday.

At 0304 GMT, the AUD/USD is trading .7826, up 0.0002 or +0.02%.

Traders are showing a limited reaction to Australia’s Trade Balance which came out better than expected at 1.06 Billion. They may be waiting for China’s Trade Balance report which is expected to come in a -70 Billion, down substantially from the previously reported 136 Billion.

AUDUSD
Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, the current price action suggests counter-trend buyers may be trying to form a support base.

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A trade through .7712 will signal a resumption of the downtrend.

The minor trend is up so it’s safe to say that momentum has shifted to the upside. A trade through .7893 will reaffirm the uptrend and signal that the buying is getting stronger.

The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. This zone is controlling the longer-term direction of the AUD/USD. Holding above this zone will help give the Forex pair an upside bias.

The intermediate range is .7988 to .7712. Its retracement zone at .7850 to .7883 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area. They will be trying to form another secondary lower top.

The extremely short-term range is .7712 to .7842. Its 50% level or pivot provided support on Wednesday at .7777.

AUDUSD
Daily AUDUSD (Short-Term)

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at .7824 and the earlier price action, the direction of the AUD/USD on Thursday is likely to be determined by trader reaction to the major 50% level at .7818.

A sustained move over .7818 will indicate the presence of buyers. This could lead to a test of the 50% level at .7850 then the 61.8% level at .7883. Taking out .7893 could trigger an acceleration to the upside.

A sustained move under .7818 will signal the presence of sellers. This could fuel a quick break into .7777, followed by .7743 then .7712.

Watch the price action and read the order flow at .7818 all session. Trader reaction to this level will tell us if the buyers are taking control.

This article was originally posted on FX Empire

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