AUD/USD Forex Technical Analysis – Weakens Under .7769, Strengthens Over .7790

The Australian Dollar is trading lower early Monday following mixed China data. China’s factory growth slowed in April from the jump seen in the previous month while retail sales missed analyst expectations, indicating more pressure on the recovery in consumption.

At 04:24 GMT, the AUD/USD settled at .7752, down 0.0031 or -0.40%.

China’s industrial production grew 9.8% in April from a year ago, slower than the 14.1% surge in March, National Bureau of Statistics data showed on Monday, but matching a consensus forecast by analysts from a Reuters poll.

Retail sales rose 17.7% year-on-year in April, much weaker than a 24.9% uptick expected by analysts and down from the jump of 34.2% seen in March.

Fixed asset investment increased 19.9% in the first four months from the same period a year earlier, versus a forecast 19.0% rise, slowing from January-March’s 25.6% increase.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .7675 will change the main trend to down. A move through .7891 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is also up. A trade through .7688 will change the minor trend to down and confirm the shift in momentum. Taking out Friday’s high at .7787 will make .7688 a new main bottom.

The short-term range is .7532 to .7891. Its retracement zone at .7711 to .7669 is support. This zone stopped the selling at .7688 last Thursday.

The main range is .8007 to .7532. Its retracement zone at .7769 to .7826 is resistance. This zone is also controlling the near-term direction of the AUD/USD.

The new minor range is .7891 to .7688. Its 50% level at .7790 is resistance. This level falls inside the main retracement zone. It stopped the buying on Friday.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday will be determined by trader reaction to the pair of 50% levels at .7769 and .7790.

Bearish Scenario

A sustained move under .7769 will indicate the presence of sellers. If this move creates enough downside momentum then look for a possible break into .7711, followed by the minor bottom at .7688 and the main bottom at .7675.

Bullish Scenario

A sustained move over .7770 will be an early sign of strength. Taking out .7790 will indicate the buying is getting stronger. This could trigger an acceleration into the main Fibonacci level at .7826.