AUD/USD Forex Technical Analysis – Needs to Hold .6979 to Sustain Upside MomentumThe direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor pivot at .6979.
The Australian Dollar is inching lower against the U.S. Dollar in a mostly lackluster trade on Monday. The currency is posting an inside move for a second session, indicating investor indecision and impending volatility.
Gains are likely being capped amid renewed concerns over the country’s economic recovery after authorities warned that the coronavirus outbreak in the country’s second-most populous state could take weeks to control.
Australia’s acting chief medical officer said the outbreak in Victoria State could take weeks to subside despite a lockdown and orders to wear masks.
Essentially, any acceleration in the number of COVID-19 cases will raise anxiety and increase uncertainty, while encouraging investors to lighten up on the long side.
At 08:26 GMT, the AUD/USD is trading .6991, down 0.0005 or -0.07%.
Weaker U.S. equity markets could be reducing demand for risky currencies, while a surge in China’s Shanghai Index could be limiting losses. Meanwhile, volume and volatility could be down ahead of the release of the RBA Monetary Policy Meeting Minutes on Tuesday and a speech from RBA Governor Philip Lowe, shortly thereafter.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7038 will signal a resumption of the uptrend. The main trend changes to down on a move through .6833.
The minor trend is also up. A trade through .6921 will change the minor trend to down. This will also shift momentum to the downside.
The minor range is .6921 to .7038. The AUD/USD is straddling its 50% level at .6979 for a third session.
The short-term range is .7065 to .6777. Its 50% level at .6921 is another potential support level. It stopped the selling at .6921 last week, while forming a support cluster in the process.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6991, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor pivot at .6979.
A sustained move over .6979 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .7038.
Overtaking .7038 could help extend the rally into a pair of main tops at .7065 and .7082.
A sustained move under .6979 will signal the presence of sellers. If sellers come in hard then look for a break into the support cluster at .6921. This is a potential trigger point for an acceleration to the downside with the three main bottoms at .6833, .6811 and .6777 the next likely downside targets.