AUD/USD Forex Technical Analysis – Counter-Trend Buyers Could Step in at .6800 to .6791

If the downside momentum resumes then look for sellers to take a shot at the 50% level at .6800. This is followed by a potential support cluster at .6795 to .6791.
James Hyerczyk

The Australian Dollar is trading lower on Monday in reaction to weaker-than-expected trade balance data from China. The Aussie is also being pressured by Friday’s stronger-than-expected U.S. Non-Farm Payrolls and consumer sentiment reports, which should be enough to prevent the Fed from cutting rates again on Wednesday.

China’s exports in November shrank for the fourth consecutive month, underscoring persistent pressures on manufacturers from the Sino-U.S. trade war but growth in imports may be a sign that Beijing’s stimulus steps are helping to stoke demand.

At 08:34 GMT, the AUD/USD is trading .6824, down 0.0017 or -0.25%.


Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6754 will signal a resumption of the downtrend. The main trend will change to up on a trade through .6930.

Last week’s two day surge did nothing to the trend or momentum. It was just a strong short-covering rally.

On the upside, the major resistance is the retracement zone at .6877 to .6925.

The main range is .6671 to .6930. Its retracement zone at .6800 to .6770 is the next potential downside target. It is also potential support.

Daily Technical Forecast

If the downside momentum resumes then look for sellers to take a shot at the 50% level at .6800. This is followed by a potential support cluster at .6795 to .6791. Aggressive counter-trend buyers could step in on a test of these levels. However, if .6791 fails to stop the selling then look for the move to possible extend into the Fibonacci level at .6770.

On the upside, the nearest resistance is the price cluster at .6862 to .6863. This area is followed closely by a major 50% level at .6877.

Side Notes

Despite last week’s price action, the fundamentals are still bearish, but there is enough optimism over a U.S.-China trade deal to underpin the currency at this time.

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