AUD/USD Forex Technical Analysis – First Downside Target Zone .7095 – .7090, Followed by .7073

The Australian Dollar is trading lower early Monday, pressured by a stronger U.S. Dollar and position-squaring ahead of next week’s major policy decision by the Reserve Bank of Australia (RBA) and the U.S. presidential elections.

Investors are moving into the greenback for protection as surging coronavirus cases in Europe and the United States and a lack of progress toward a U.S. stimulus package put traders in a cautious mood.

At 05:34 GMT, the AUD/USD is trading .7117, down 0.0019 or -0.27%.

As far as the stimulus package is concerned, U.S. House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan – but there have been few tangible signs that a long-stalled deal is actually nearer.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7021 will signal a resumption of the downtrend. Taking out .7243 will change the main trend to up.

The first minor range is .7243 to .7021. Its retracement zone at .7132 to .7158 is resistance. This zone stopped the rally on Friday.

The second minor range is .7021 to .7158. Its retracement zone at .7090 to .7073 is the primary downside target area.

The major support is the retracement zone at .7095 to .7020.

The most likely downside target today is a potential support pivot at .7095 to .7090. Counter-trend buyers could come in on a test of this area.

Daily Swing Chart Technical Forecast

The early price action indicates 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 .7132.

Bearish Scenario

A sustained move under .7132 will indicate the presence of sellers. This could trigger a break into the support cluster at .7095 to .7090. Aggressive counter-trend buyers could come in on a test of this area, but if .7090 fails as support then look for the selling to possibly extend into the minor Fibonacci level at .7073.

Bullish Scenario

Overtaking and sustaining a move over .7132 will signal the presence of buyers. This could trigger a rally into the price cluster at .7158. This is a potential trigger point for an acceleration to the upside with the next target .7210.

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