AUD/USD Forex Technical Analysis – Traders Still Probing Major Retracement Zone at .7818 to .7743

Investor demand for risky assets helped drive the Australian Dollar higher on Monday. The rally was fueled by strong gains in the global equity markets as concerns over trade wars subsided.

The AUD/USD settled at .7748, up 0.0055 or +0.71%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, the consolidation the last four days suggests momentum may be getting ready to shift to the upside.

A trade through .7672 will signal a resumption of the downtrend. Overcoming last week’s high at .7784 will indicate the buying is getting stronger. This is likely to be a combination of short-covering and light speculative buying.

The main range is .7501 to .8135. Its retracement zone is .7818 to .7743. This zone is controlling the longer-term direction of the market. A sustained move under this zone will give the Aussie a downside bias. Holding inside this zone will create a neutral tone.

The short-term range is .7916 to .7672. Its 50% level or pivot at .7794 is inside the main retracement zone. It is controlling the short-term direction of the market. It is also the primary upside target. Since the main trend is down, sellers could return on a test of this level.

Daily Swing Chart Technical Forecast

Based on Monday’s close at .7748, the direction of the AUD/USD today is likely to be determined by trader reaction to the main Fibonacci level at .7743.

A sustained move over .7743 will indicate the presence of buyers. This could generate the upside momentum needed to challenge last week’s high at .7784, followed by the short-term pivot at .7794. Sellers could stop the rally at this point.

If the buying is strong enough to overcome the selling then look for the rally to extend into the main 50% level at .7818.

A sustained move under .7743 will signal the presence of sellers. This could trigger the downside momentum needed to retest .7672.

The daily chart is wide open under .7672 so taking it out could trigger an acceleration to the downside. The next major downside target is the December 8 main bottom at .7501.