AUD/USD Forex Technical Analysis – Weakens Under .6767, Strengthens Over .6792

The Australian Dollar is trading slightly higher on Monday after gapping the opening and following through to the upside. The early move was fueled by a firmer Chinese Yuan, which rose as high as 7.0967 per dollar in offshore trade. The Aussie began giving back some of its earlier gains as the Yuan retraced its earlier rally as fears of a gloomier outcome to the trade talks crept back in and Chinese stocks fell.

At 08:17 GMT, the AUD/USD is trading .6768, up 0.0004 or +0.05%.

Helping to contribute to the Aussie’s two-sided trade were mixed flash purchasing managers’ reports. Flash Manufacturing PMI came in at 49.4, down from a revised lower 50.9. Flash Services PMI was 52.5, up from the previously reported 49.1.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6895 will change the main trend to up. A move through .6688 will signal a resumption of the downtrend.

The main range is .7082 to .6688. Its retracement zone at .6880 to .6927 is resistance. This zone stopped the rally at .6895 on September 12.

The short-term range is .6688 to .6895. Its retracement zone at .6792 to .6767 is currently being tested. Aggressive counter-trend buyers may be trying to form a secondary higher bottom.

Daily Technical Forecast

Based on the early price action and the current price at .6767, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .6767.

Bearish Scenario

A sustained move under .6767 will indicate the presence of sellers. The next two downside target angles come in at .6758 and .6755.

Crossing to the weak side of the angle at .6755 will put the AUD/USD in a bearish position with the next target angle coming in at .6723.

Bullish Scenario

A sustained move over .6767 will signal the presence of buyers. The first upside target is the short-term 50% level at .6792. Overtaking this level could trigger a rally into a downtrending Gann angle at .6825.