The AUD/USD is trading flat on Monday. We did see some short-covering early in the session, following a steep sell-off last week and a potentially bullish closing price reversal bottom on Friday. The fundamentals are bearish so the buying is likely related to profit-taking and end-of-the-month position-squaring.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .7624 will signal a resumption of the downtrend. This may create enough downside momentum to challenge the July 5, 2017 main bottom at .7571.
Today’s price action has helped make .7624 a new minor bottom.
The new short-term range is .7897 to .7624. If the developing rally gains traction, we could see a rally into the retracement zone at .7761 to .7793. Inside this zone is a major Fibonacci level at .7782. This is also a valid upside target.
Daily Forecast
Based on the current price at .7672 and the earlier price action, the direction of the AUD/USD today is likely to be determined by trader reaction to a downtrending angle at .7677.
A sustained move under .7677 will signal the presence of sellers. If this move generates enough downside pressure then look for a possible test of last week’s low at .7624.
A sustained move over .7677 will indicate the presence of buyers. The daily chart is wide open to the upside so if the rally gains traction, we could see a possible retracement into the short-term 50% level at .7760 over the near-term.