The Australian Dollar is edging higher on Monday after last week’s steep sell-off. The catalyst behind today’s strength is increased demand for higher risks assets. The rally is a little tentative, however, as investors express concerns over the increasing tensions between the United States and China. Stronger gold and crude oil prices are also helping to boost the commodity-linked currency.
At 09:02 GMT, the AUD/USD is trading .6444, up 0.0028 or +0.43%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower with the formation of the secondary lower top at .6561.
The main trend will change to down on a trade through .6373. A move through .6570 will signal a resumption of the uptrend.
The first minor range is .6570 to .6373. Its 50% level at .6472 is resistance.
The second minor range is .6254 to .6570. Its 50% level at .6412 is acting like support.
The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is major support. It is also controlling the longer-term direction of the AUD/USD.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the 50% levels at .6472 and .6412.
A sustained move over .6472 will indicate the presence of buyers. If momentum begins to build to the upside then we could see a near-term test of .6561 to .6570.
A sustained move under .6412 will signal the presence of sellers. This could lead to a quick test of .6402. If this level fails then look for the selling to possibly extend into the next main bottom at .6373. This is a potential trigger point for an acceleration to the downside.
This article was originally posted on FX Empire
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