Yahoo Finance AUD/USD Forex Technical Analysis – Holding Pivot at .6718 Gives Aussie Slight Upside Bias
The Australian Dollar is trading higher on Monday, helped by thin volume due to the U.S. bank holiday and the announcement of fresh stimulus from China. Earlier in the session, China’s central bank cut the interest rate on its medium-term lending, a move expected to pave the way for a reduction in the benchmark loan prime rate on Thursday , to lower borrowing costs for companies hit by the virus.
At 09:04 GMT, the AUD/USD is trading .6725, up 0.0011 or +0.16%.
In addition to the rate cut, China is planning targeted tax cuts while increasing government spending, Finance Minister Liu Kun wrote Sunday in China’s Communist Party magazine Qiushi. The move is designed to alleviate the shock of the virus outbreak on businesses.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6774 will change the main trend to up. A move through .6662 will signal a resumption of the downtrend.
The minor trend is also down. A trade through .6750 will change the minor trend to up. This will also shift momentum to the upside.
The first minor range is .6774 to .6662. Its 50% level at .6718 is new support. The second minor range is .6662 to .6750. Its 50% level at .6706 is additional support. Holding above these 50% levels will give the AUD/USD a slight upside bias.
Daily Technical Forecast
Based on the early price action and the current price at .6725, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the uptrending Gann angle at .6722.
Bullish Scenario
A sustained move over .6722 will indicate the presence of buyers. The first upside target is a downtrending Gann angle at .6734. Since the main trend is down, we’re seeing sellers at this angle. However, overtaking it could trigger a rally into the minor top at .6750.
Taking out .6750 will change the minor trend to up. This could trigger a further rally into the next downtrending Gann angle at .6754.
Bearish Scenario
A sustained move under .6722 will signal the presence of sellers. This could lead to a quick test of the 50% level at .6718. If it fails as support then look for the selling pressure to extend into the next 50% level at .6706.
This article was originally posted on FX Empire
