AUD/USD Forex Technical Analysis – Struggling with Resistance at .7182 to .7212; Downside Target is .7090

The Australian Dollar is edging lower early Monday in a limited trade as investors prepare for a busy week of central bank meetings, including the Federal Reserve, which is expected to drive volatility and could help the U.S. Dollar. Meanwhile, traders continue to monitor the spread of the Omicron coronavirus variant.

At 07:00 GMT, the AUD/USD is trading .7158, down 0.0014 or -0.20%. On Friday, the Invesco CurrencyShares Australian Dollar Trust (FXA) finished at $71.13, up $0.16 or +0.23%.

Aussie investors are bracing for the last Federal Reserve meeting of the year, hungry to learn how quickly the central bank plans to finish unwinding its bond-buying program and when it may start to raise rates.

Daily Swing Chart Technical Analysis

The main trend is down according to the main swing chart, however, momentum is trending higher.

A trade through .7431 will change the main trend to up. A move through .6993 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through .7187 will indicate the buying is getting stronger. A move through .7132 will signal the return of sellers.

On the upside, the nearest resistance is a pair of 50% levels at .7182 and .7212. This is followed by the short-term retracement zone at .7275 to .7341. Since the main trend is down, sellers are likely to defend this area.

The minor range is .6993 to .7187. Its 50% level at .7090 is the primary downside target. Aggressive counter-trend buyers could come in on the first test of this level.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7159.

Bearish Scenario

A sustained move under .7159 will indicate the presence of sellers. The first downside target is .7132. This is a potential trigger point for an acceleration into the minor pivot at .7090.

Bullish Scenario

A sustained move over .7159 will signal the presence of buyers. This could lead to a labored rally with upside targets coming in at .7182, .7187 and .7212.

The pivot at .7212 is a potential trigger point for an acceleration into the short-term retracement zone at .7275 to .7341.