AUD/USD Forex Technical Analysis – Trader Reaction to .6355 Pivot Sets the Tone on Monday

The Australian Dollar is trading lower on Monday as global growth fears drove crude oil prices to a 21-year low, weakening demand for the commodity-linked currency.

Additionally, risk sentiment, which supported the Aussie last week, is not as positive as it was, which is encouraging some investors to move funds into the safe-haven U.S. Dollar.

Prices could weaken throughout the session if investors continue to proceed with caution, while capping demand for risky appetite.

At 06:57 GMT, the AUD/USD is trading .6352, down 0.0011 or -0.18%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6445 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at .5980.

The minor trend is also up. A trade through .6265 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is .6445 to .6265. Its 50% level or pivot at .6355 is controlling the direction of the AUD/USD on Monday.

The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is support. This zone is controlling the near-term direction of the AUD/USD.

The short-term range is .5510 to .6445. Its retracement zone at .5977 to .5867 is additional support.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6352, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor pivot at .6355.

Bullish Scenario

A sustained move over .6355 will indicate the presence of buyers. If this can create enough upside momentum then look for a retest of the main top at .6445. This price is a potential trigger point for an acceleration to the upside with the next major target the March 9 main top at .6685.

Bearish Scenario

A sustained move under .6355 will signal the presence of sellers. This could trigger a break into the minor bottom at .6265, followed by the main Fibonacci level at .6236.

Side Notes

The upside momentum appears to be weakening, but we really won’t know how strong the selling is until .6236 fails as support. This will be the first sign of weakness. The second major sign will be a failure at .6097.