James Hyerczyk
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The Australian Dollar is trading nearly flat on Monday after clawing back earlier losses. The weakness after the opening was fueled by follow-through selling after Friday’s weak close. The price action the last two sessions is basically mirroring the movement in U.S. Treasury yields and the U.S. Dollar as both try to stabilize following steep drops the past two weeks.

At 06:06 GMT, the AUD/USD is trading .7734, unchanged.

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The Aussie surged and the trend changed to up last week when the country reported strong labor market results.

Data from the Australian Bureau of Statistics (ABS) showed 70,700 net new jobs were created in March, double forecasts of a 35,000 gain. Unemployment dropped to 5.6%, from 5.8% in February, marking a remarkable recovery from the top of 7.5% hit last July when coronavirus lockdowns tipped the economy into recession.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7761 will signal a resumption of the uptrend. A trade through .7586 will change the main trend to down.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This area is also controlling the near-term direction of the AUD/USD.

The short-term range is .7849 to .7532. The AUD/USD is currently testing its retracement zone at .7690 to .7728 with buyers trying to establish a new higher support base.

The minor range is .7532 to .7761. Its 50% level or pivot at .7646 is potential support.


Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.

Bullish Scenario

A sustained move over .7728 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into .7761 to .7770. The latter is a potential trigger point for an acceleration into the main Fibonacci level at .7826.

Bearish Scenario

A sustained move under .7728 will signal the presence of sellers. The first downside target is a 50% level at .7690. Since the main trend is up, buyers are likely to come in on a test of this level.

If .7690 fails as support then look for the selling to possibly extend into the minor 50% level at .7646.

For a look at all of today’s economic events, check out our economic calendar.
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