AUD/USD Forex Technical Analysis – Tight Range as Investors Eye Key US Consumer Confidence Data

The Australian Dollar is edging higher on Tuesday as the country prepares to release its annual budget and ahead of its quarterly consumer price data on Wednesday. The latter is expected to have a major influence on next week’s rate policy meeting.

At 07:28 GMT, the AUD/USD is trading .6329, up 0.0016 or +0.25%. On Monday, the Invesco CurrencyShares Australia Dollar Trust ETF (FXA) settled at $62.45, down $0.72 or -1.14%.

Traders are also monitoring the situation in China where the onshore Yuan extended the weakness seen since Chinese leader Xi Jinping’s choice of leadership team at the twice-a-decade Communist Party Congress raised fears growth will be sacrificed for ideology-driven policies.

Traders Eyeing US Consumer Confidence Report

Looking ahead, at 13:00 GMT, traders will get a chance to react to a pair of U.S. housing reports. The Home Price Index (HPI) is expected to show a -0.7% decline and the S&P/CS Composite-20 HPI is expected to come in at 14%, down from 16.1%.

At 14:00 GMT, the U.S. will release data on Conference Board Consumer Confidence and Richmond Manufacturing. The consumer confidence data is expected to show a decline from 108.0 to 105.9. This report will be scrutinized closely because it comes out only seven days before the Fed begins its two-day meeting. The results could be used to determine whether the Fed raises rates 75-basis-points or 50-basis-points.

Domestically, on early Wednesday, Australia will release a report on consumer inflation. This report will influence next week’s Reserve Bank (RBA) policy decision.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .6548 will change the main trend to up. A move through .6170 will signal a resumption of the downtrend.

The minor range is .6170 to .6412. Its pivot at .6291 is support. The short-term range is .6548 to .6170. Its pivot at .6359 is resistance. The major resistance is the long-term Fibonacci level at .6359.

Daily Swing Chart Technical Forecast

Trader reaction to .6291 is likely to determine the direction of the AUD/USD on Tuesday.

Bullish Scenario

A sustained move over .6291 will indicate the presence of buyers. The first upside target is a pivot at .6359. Overtaking this level will indicate the buying is getting stronger with .6412 the next target.

Bearish Scenario

A sustained move under .6291 will signal the presence of sellers. This could trigger a sharp break into the minor bottom at .6211, followed by the main bottom at .6170.

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