AUD/USD Forex Technical Analysis – Weakens Under .6760, Strengthens Over .6786Based on the early price action and the current price at .6757, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor Fibonacci level at .6760.
The Australian Dollar is trading flat to lower early Monday on well-below average volume as traders position themselves ahead of Tuesday’s Reserve Bank of Australia (RBA) interest rate decision. According to reports, the RBA will cut its benchmark interest rate for the third time since June, as economists warn that reduced interest rates are losing their power to revitalize growth.
At 04:10 GMT, the AUD/USD is trading .6757, down 0.0009 or -0.13%.
The Australian Financial Review’s economist survey for the September quarter predicts the official cash rate will fall to 0.75 percent by the end of the year from 1 percent, and reach 0.50 percent by June, according to the median forecaster.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. Momentum is even trending lower after a two-week counter-trend rally. A trade through .6688 will signal a resumption of the downtrend. The main trend will change to up on a move through .6895.
The minor trend is also down. This is controlling the downside momentum. Taking out last week’s low at .6739 will signal increasing selling pressure.
The minor range is .6677 to .6895. The AUD/USD has been straddling its retracement zone at .6786 to .6760 for seven sessions. Trader reaction to this zone will determined the near-term direction of the Forex pair. Trend traders are trying to move away from this zone to the downside. Aggressive counter-trend buyers are trying to form a secondary higher bottom.
The main range is .7082 to .6677. Its retracement zone at .6880 to .6927 is the major resistance area.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6757, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the minor Fibonacci level at .6760.
A sustained move under .6760 will indicate the presence of sellers. The first downside target is .6739. Taking out this level could trigger an acceleration to the downside with the next targets the main bottom at .6688 and the August 7 main bottom at .6677.
A sustained move over .6760 will signal the presence of buyers. The first target is the minor 50% level at .6786, followed by a high at .6806. We could see a short-covering rally if this level is taken out with strong buying volume.