AUD/USD Forex Technical Analysis – In Position to Challenge Major Retracement Zone at .6877 to .6925

Based on the early price action, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at .6856.
James Hyerczyk

The Australian Dollar is trading at a four-week high early Monday as investors continue to react to last week’s positive September employment change report, optimism over a U.S.-China trade deal and hawkish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe. At the end of last week, financial market traders reduced the chance of a back-to-back 0.25 percentage point interest rate cut in November to just 16 percent from almost 50 percent last week.

At 03:30 GMT, the AUD/USD is trading .6892, up 0.0006 or +0.09%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Friday’s high at .6857. The next upside target is the main top at .6895. A trade through .6724 will change the main trend to down.

The main range is .7082 to .6671. Its retracement zone at .6877 to .6925 is the primary upside target. Watch for profit-taking and counter-trend selling on the first test of this area.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at .6856.

Bullish Scenario

A sustained move over .6856 will indicate the presence of buyers. If this can generate enough upside momentum then look for the rally to extend into the main 50% level at .6877. Look for profit-taking on the first test of this level.

Overtaking .6877 will indicate the buying is getting stronger. The next target is the main top at .6895. Taking out this level will reaffirm the uptrend. This could lead to a test of the Fibonacci level at .6925.

Bearish Scenario

A sustained move under .6856 will signal the presence of sellers. If this move can create enough downside momentum then we could see a retracement of the rally from the .6724 main bottom. This would make .6795 the next likely downside target.

Side Note

The retracement zone at .6877 to .6925 is very important to the near-term structure of the AUD/USD. This zone is likely to be tested all week.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.