AUD/USD Forex Technical Analysis – Strengthens Over .7733, Weakens Under .7700

The Australian Dollar is trading lower early Monday but attempting to claw back those losses. Lower demand for riskier assets set the tone early, but a drop in U.S. Treasury yields helped the Aussie stabilize.

Sellers were reacting to turmoil in the financial markets over the weekend after the Turkish Lira slumped toward a record low versus the U.S. Dollar after President Tayyip Erdogan stunned investors by replacing the hawkish central bank governor with a critic of high interest rates. The news pressured the higher risk Aussie while driving investors into the safe-haven Japanese Yen and U.S. Dollar.

At 07:10 GMT, the AUD/USD is trading .7720, down 0.0026 or -0.34%.

If the reaction to the Turkish Lira news simmers down then look for Aussie traders to continue to react to the move in Treasury yields. Lower yields throughout the day could drive the Australian Dollar higher by the close.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on March 18.

A trade through .7700 will change the main trend to down. A move through .7849 will negate the closing price reversal top and signal a resumption of the uptrend.

The Australian Dollar is also trading on the weak side of the main retracement zone at .7733 to .7786. This zone is controlling the near-term direction of the AUD/USD.

The short-term range is .8007 to .7621. Its retracement zone at .7814 to .7860 is another potential resistance area.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at .7733.

Bearish Scenario

A sustained move under .7733 will indicate the presence of sellers. The first downside target is the main bottom at .7700. Taking out this level will change the main trend to down. This could trigger an acceleration to the downside with .7621 the next likely downside target.

Bullish Scenario

A sustained move over .7733 will signal the presence of buyers. This could trigger an acceleration into .7786, this is followed by .7814 to .7860. Inside this zone is the main top at .7849.

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