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AUD/USD Forex Technical Analysis – Testing .7499-.7379 Retracement Zone; Could Form Reversal Bottom

By:
James Hyerczyk
Published: Jun 21, 2021, 09:20 UTC

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7480.

AUD/USD

In this article:

The Australian Dollar is edging higher on Monday, taking a breather from recent losses on the back of a recovery in demand for riskier assets, lower Treasury yields and a weaker U.S. Dollar. Nonetheless, gains are expected to be capped by hawkish comments from the Federal Reserve last week and ahead of a key Reserve Bank of Australian meeting on July 6.

At 09:01 GMT, the AUD/USD is trading .7496, up 0.0016 or +0.21%.

In economic news, Australian retail sales rose less than expected in May, with a snap coronavirus lockdown in the country’s second most populous state of Victoria hurting demand, preliminary data showed on Monday.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed earlier in the session when sellers took out Friday’s low. A trade through the intraday low at .7477 will signal a resumption of the downtrend.

The main trend will change to up if buyers can take out the last main top at .7776. This is highly unlikely today. Tuesday will be the seventh day down from the last main top which will put the AUD/USD inside the window of time for a potentially bullish closing price reversal bottom. The early price action, however, suggests the reversal bottom may be coming a day early.

The main support is the long-term retracement zone at .7499 to .7379. The AUD/USD is currently testing the upper level of this zone.

The new minor range is .7776 to .7477, which makes its 50% level at .7627 the nearest potential upside target. Since the main trend is down, look for sellers 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 .7480.

Bearish Scenario

A sustained move under .7480 will indicate the presence of sellers. If this move creates enough downside momentum then look for a retest of the intraday low at .7477, followed by the December 21, 2020 main bottom at .7462. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over .7480 will signal the presence of buyers. Overcoming the 50% level at .7499 will indicate the buying is getting stronger. If this move generates enough upside momentum then look for the rally to possibly extend into the minor pivot at .7627.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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