AUD/USD Forex Technical Analysis – Trader Reaction to .7394 Minor Pivot Sets the Tone

The Australian Dollar is trading lower on Monday after posting a weak performance the previous session from its multi-week rally that had been driven by hopes for a vaccine-fueled global recovery next year.

The Aussie, which is a liquid proxy for risk, has rallied in recent weeks as investors chose to focus on the future prospects of a COVID-19 vaccine and the ensuing global rally in risk assets, rather than the worldwide resurgence in infections.

At 08:12 GMT, the AUD/USD settled at .7413, down 0.0015 or -0.20%.

In other news, Australian job advertisements jumped for a seventh straight month in November as the second-most populous state of Victoria emerged out of its long coronavirus-induced lockdown.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7449 will signal a resumption of the uptrend. The main trend will change to down on a move through .7339.

The minor range is .7339 to .7449. Its 50% level at .7394 is the first downside target.

The second minor range is .7255 to .7449. Its 50% level at .7352 is another potential support area.

The third minor range is .7222 to .7449. Its 50% level at .7335 is an additional target.

The short-term range is .6991 to .7449. If the main trend changes to down then its retracement zone at .7220 to .7166 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the first pivot at .7394.

Bullish Scenario

A sustained move over .7394 will indicate the presence of buyers. If this move creates enough upside momentum then look for a retest of .7449. Taking out this level could spike the market into the July 9, 2018 main top at .7484.

Bearish Scenario

Crossing to the weak side of the former top at .7414 will be the first sign of weakness. Taking out the pivot at .7394 will indicate the selling is getting stronger. This could trigger a break into the next support cluster at .7352, .7339 and .7335.