The Australian Dollar is edging higher early Thursday as traders followed Asian shares and Wall Street higher. The commodity-linked currency is also being underpinned by slight upticks in crude oil and gold.

Traders are also reacting to the Federal Reserve meeting minutes, released late Wednesday. Although the minutes showed policymakers in June emphasized the need to fight inflation even if it meant slowing an economy that already appears on the brink of recession, the news was not a surprise and may have already been priced into the market.

At 04:17 GMT, the AUD/USD is trading .6819, up 0.0038 or +0.56%. On Wednesday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $67.24, down 0.07 or -0.11%.

Australia May Trade Surplus Jumps to Record A$16 Billion

The AUD/USD is also receiving a slight boost from a surge in the Australian Trade Balance. Australia’s balance of goods and services for May, seasonally adjusted, released by the Australian Bureau of Statistics on Thursday came in at A$15.97 billion. Analysts were looking for a trade surplus of A$10.725 billion.

The big jump was likely the result of an improving economy and an extremely weak Australian Dollar. Total exports came in at A$58.402 billion, while total exports were A$42.437 billion.

Short-Term Outlook

Trader reaction to .6829 is likely to determine the direction of the AUD/USD early Thursday.

Bearish Scenario

A sustained move under .6829 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into this week’s low at .6762.

Taking out .6762 will indicate the selling pressure is getting stronger. If the selling pressure is strong enough, we could see an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the next major target the May 15, 2020 main bottom at .6402.

Bullish Scenario

A sustained move over .6829 will signal the presence of buyers. This could trigger the start of a labored rally with the first target a minor pivot at .6863, followed by a short-term retracement zone at .6916 – .6952. This is the last potential resistance before the .6964 main top. Taking out this level will change the main trend to up.

Side Notes

After piercing a pair of former main bottoms at .6811 and .6777 on its way to a multi-year low at .6762, the AUD/USD is consolidating. This may have nothing to do with economics, but rather buyers trying to prevent a collapse in the Forex pair to .6402.

For a look at all of today’s economic events, check out our economic calendar.