James Hyerczyk
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The Australian Dollar is trading lower, but hovering near a six-week high and key technical retracement level early Monday as investors await the release of a series of key economic reports from China. The early pressure is being generated by a jump in crude oil prices after a number of drones attacked key Saudi Arabian oil facilities over the week-end, leading to the loss of about 50% of the countries production.

At 01:43 GMT, the AUD/USD is trading .6872, down 0.0008 or -0.11%.

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While the geopolitical event in Saudi Arabia is keeping a lid on prices, last week’s easing of trade tensions between the United States and China ahead of the early October trade talks is helping to underpin prices.


Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at .6688 on September 3.

The minor trend is up. This is also helping to generate the upside momentum. A trade through the minor top at .6895 will indicate the buying is getting stronger. A move through .6848 will change the minor trend to down and shift momentum to the downside.

The main range is .7082 to .6677. Its retracement zone at .6880 to .6927 is acting like resistance. This zone is also controlling the longer-term direction of the AUD/USD.

The short-term range is .6688 to .6895. If the minor trend changes to down then look for a break into its retracement zone at .6791 to .6767.

Daily Technical Forecast

Based on the early price action and the current price at .6872, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the uptrending Gann angle at .6868 and the 50% level at .6880. In between these two levels is the downtrending Gann angle at .6877.

Bearish Scenario

A sustained move under .6868 will indicate the presence of sellers. Taking out the minor bottom at .6848 will change the minor trend to down. This could trigger an acceleration to the downside with the first target the short-term 50% level at .6791.

Bullish Scenario

A sustained move over .6880 will signal the presence of buyers. If this move generates enough upside momentum then look for a test of last week’s high at .6895. Taking out this level could trigger an acceleration to the upside with the main Fibonacci level at .6927 the next upside target.

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