AUD/USD Forex Technical Analysis – Strengthens Over .7202, Weakens Under .7167

The Australian Dollar is trading slightly lower early Monday. Volatility and volume are low as investors prepare for the latest interest rate and monetary policy decisions from the Reserve Bank of Australia (RBA) early Tuesday and the U.S. mid-term election results later in the day.

Earlier today, China reported that its services sector stalled to the slowest growth since September 2017, as business recorded slow demand on new orders. The Caixin/Markit services purchasing managers’ index fell 2.3 from 53.1 in September to 50.8 last month.

At 0623 GMT, the AUD/USD is trading .7194, down 0.0004 or -0.06%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Friday when buyers took out .7160. A trade through .7259 will signal a resumption of the uptrend with .7314 the next target. A trade through .7020 will change the main trend to down.

The main range is .7314 to .7020. The market is currently trading inside its retracement zone at .7167 to .7202. This zone is controlling the direction of the Aussie early Monday.

The short-term range is .7020 to .7259. If the AUD/USD should weaken then its retracement zone at .7139 to .7111 should become the primary downside target. Since the main trend is up, buyers could show up on a 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 is likely to be determined by trader reaction to the main Fibonacci level at .7202.

A sustained move under .7202 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into the main 50% level at .7167.

If .7167 fails as support then look for the selling to extend into .7139 to .7113.

A sustained move over .7202 will signal the presence of buyers. If this move can generate enough upside momentum then look for the rally to possibly extend into Friday’s high at .7259. This is a potential trigger point for a potential acceleration into .7314.

The range could be tight today as investors await the RBA decisions, but most of all the results of the U.S. mid-term elections.