AUD/USD Forex Technical Analysis – Low Holiday Volume Affecting Volatility

Concerns over the escalating trade tensions between the United States and China are driving investors out of higher-yielding currencies like the Australian Dollar on Monday. Volume is thin because of an Australian bank holiday and ahead of Tuesday’s Reserve Bank of Australia’s interest rate decision. The RBA is widely expected to leave its benchmark rate at 1.50%.

At 1115 GMT, the AUD/USD is trading .7388, down 0.0009 or -0.13%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .7318 will change the trend to down. A move over .7465 will reaffirm the uptrend.

The minor trend is down. This is helping to give the Aussie its downside bias. A trade through .7442 will change the minor trend to up. A move through .7348 will indicate the selling pressure is getting stronger.

The Aussie is also trading on the weak side of a 50% price cluster at .7392 to .7397. This is also contributing to the downside bias.

The short-term range is .7465 to .7348. Its retracement zone at .7407 to .7420 is also a resistance area.

Daily Swing Chart Technical Forecast

Based on the early price and the current price at .7388, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the 50% level at .7392.

A sustained move under .7392 will indicate the presence of sellers. The daily chart is wide open to .7348 so if selling volume does pick up, we could see an acceleration to the downside.

Overcoming .7392 and sustaining the move is likely to lead to a labored move with potential resistance lined up at .7397, .7407 and .7420.

Low holiday volume, concerns over US-China trade relations and the RBA interest rate decision are likely to keep a lid on any major rally today.