AUD/USD Forex Technical Analysis – Trader Reaction to .7770 – .7826 Retracement Zone Sets Near-Term Tone

The Australian Dollar is trading slightly higher early Monday. With the country on a bank holiday, volume is noticeably light and the early trading range tight. The Aussie is testing the same resistance that stopped rallies from Tuesday through Friday last week.

Taking out this level could trigger a surge to the upside. If sellers take control then look for a potential move into last week’s low. This suggests a sideways trade, which is possible since investors may not want to commit to either side of the market until the Federal Reserve makes its announcements on Wednesday.

At 01:29 GMT, the AUD/USD is trading .7762, up 0.0013 or +0.17%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7816 will signal a resumption of the uptrend. The main trend will change to down on a move through .7691.

The main range is .8007 to .7532. Its retracement zone at .7770 to .7826 is resistance. This area stopped the buying on April 20 at .7816.

The short-term range is .7532 to .7816. If the trend changes to down then its retracement zone at .7674 to .7640 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .7770.

Bullish Scenario

A sustained move over .7770 will indicate the presence of buyers. If this move creates enough upside momentum then look for the buying to possibly extend into the main top at .7816, followed by the main Fibonacci level at .7826.

Bearish Scenario

A sustained move under .7770 will signal the presence of sellers. If this move is able to create enough downside momentum then look for the selling to possibly extend into the main bottom at .7691.

Taking out .7691 will change the main trend to down. This could trigger a break into the short-term retracement zone at .7674 to .7640.