AUD/USD Forex Technical Analysis – Jumps after Successful Test of .7711 to .7669 Short-Term Retracement Zone

The Australian Dollar is surging on Monday, putting it on track to post a second consecutive monthly gain. The strong advance is likely being fueled by end-of-the-month position squaring and relatively low volume due to the U.S. Memorial Day holiday.

Helping to cap gains are concerns that the Reserve Bank will extend its relatively dovish outlook when it announces its monetary policy decisions early Tuesday. Meanwhile, high-commodity prices remain supportive for the Aussie.

At 05:37 GMT, the AUD/USD is trading .7729, up 0.0021 or +0.27%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down last Friday. A trade through .7677 will signal a resumption of the downtrend, while a move through .7675 will reaffirm the downtrend. The main trend will change to up on a move through .7796.

The short-term range is .7532 to .7891. Its retracement zone at .7711 to .7669 is support. This zone recently stopped the selling pressure on May 13, May 24 and May 28.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This zone stopped the buying on May 18 at .7814 and on May 26 at .7796.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .7711.

Bullish Scenario

A sustained move over .7712 will indicate the presence of buyers. The first objective is Friday’s high at .7747. Taking out this level will make .7677 a new minor bottom. This could create the upside momentum needed to drive the Aussie into the main 50% level at .7770.

Bearish Scenario

A sustained move under .7711 will signal the presence of sellers. The first downside target is Friday’s low at .7677, followed closely by a main bottom at .7675 and the short-term Fibonacci level at .7669. The latter is a potential trigger point for an acceleration to the downside.