The AUD/USD is trading higher early Wednesday. There are no major reports out of Australia, but the currency is being supported by rising commodity prices and weaker U.S. Treasury yields.
The main trend is up according to the daily swing chart. Taking out the main top at .7729 will reaffirm the uptrend. The next main top comes in at .7897.
The market is also stair-stepping through a series of retracement levels. Each resistance level will turn into support if overcome by rising volume.
The main range is .7897 to .7501. The AUD/USD is currently trading inside its retracement zone at .7699 to .7746. Trader reaction to this zone will determine the near-term direction of the market.
A sustained move over .7746 will indicate the buying is getting stronger. This could lead to an eventual test of a major 50% level at .78125.
A sustained move under .7699 will indicate the return of sellers. This move could trigger a break into the major 50% level at .7642.
Basically, look for the upside bias to continue on a sustained move over .7746. Crossing to the weak side of the 50% level at .7642, on the other hand, will indicate that sellers are returning.
This article was originally posted on FX Empire
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