AUD/USD Forex Technical Analysis —


The direction of the AUD/USD is likely to be determined by trader reaction to the minor 50% level at .7176 and the Fibonacci level at .7192.

The risk-sensitive Australian Dollar is edging higher early Monday but remains contained by its five-day range as investors continue to digest comments from Reserve Bank of Australia Governor Philip Lowe from late last week and political developments in the United States that could weigh on risk sentiment.

At 05:20 GMT, the AUD/USD is trading .7178, up 0.0006 or +0.08%.
Late last week, Australia’s central bank called on all levels of government to “put all shoulders to the wheel” to fund the spending desperately needed to generate jobs and drag the economy out of its deepest recession in about a century. Traders read the comment as friendly to the economy and Aussie Dollar.

But wait, there’s more!

Governor Lowe also said he would like the Australian Dollar lower to help boost employment, but it is not overvalued. He also ruled out a central bank intervention, saying it wouldn’t work anyway.

Finally, Lowe added that the RBA still has weapons to use and negative rates are not likely.
In the United States, House Speaker Nancy Pelosi said Sunday she is calling the House back into session over the crisis at the U.S. Postal Service, setting up a political showdown amid growing concerns that the Trump White House is trying to undermine the agency ahead of the election.

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AUD/USD Forex Technical Analysis
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7243 will signal a resumption of the uptrend. The main trend will change to down if sellers take out the last swing bottom at .7109.

The minor trend is up. A trade through .7132 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is .7243 to .7109. Its retracement zone at .7176 to .7192 is potential resistance. The AUD/USD is currently straddling this zone. Trader reaction to this area is likely to set the tone for the rest of the session on Monday.

Besides, the expert market analysts of reportedly have stated that the short-term range is .6833 to .7243. If the main trend changes to down then its retracement zone at .7038 to .6990 will become the first objective.

Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .7178, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor 50% level at .7176 and the Fibonacci level at .7192.

Aggressive counter-trend sellers are trying to form a potentially bearish secondary lower top, while trend trading buyers are trying to fuel a retest of the main top at .7243.

Bullish Scenario
A sustained move over .7192 will indicate the presence of buyers. If this creates enough upside momentum then look for a possible near-term test of the main top at .7243.

Bearish Scenario
A sustained move under .7192 will signal the presence of sellers. This could trigger a break into the minor bottom at .7132, followed by the main bottom at .7109. This is a potential trigger point for an acceleration to the downside.


William Castillo

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