The riskier Australian Dollar is trading higher on Monday, even after a resurgence of COVID-19 infections in Asia. The state of Victoria in Australia reported the country’s highest daily increase on Monday, prompting authorities to warn that the six-week local lockdown may be extended.
The Aussie rose as the U.S. Dollar fell to its lowest level against a basket of major currencies since September 2018 overnight. The move was fueled by deteriorating U.S-China relations and domestic concerns as U.S. COVID-19 infections showed no sign of slowing.
At 11:57 GMT, the AUD/USD is trading .7136, up 0.0030 or +0.42%.
As COVID-19 infections show no signs of slowing in the U.S., investors are doubtful of a quick economic recovery. Nearly a quarter of the global total coronavirus deaths have been in the United States, where unemployment claims unexpectedly rose last week.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .7182 will signal a resumption of the uptrend. The main trend will change to down on a trade through .6833. This is highly unlikely, but due to the prolonged move up in terms of price and time, the AUD/USD is still vulnerable to a closing price reversal top.
The minor trend is also up. The new minor bottom is .7064. A trade through this price will change the minor trend to down. This will also shift momentum to the downside.
The first minor range is .7182 to .7064. Its 50% level at .7123 is a key level to watch today.
The second minor range is .6963 to .6182. Its 50% level at .7072 is potential support.
The short-term range is .6833 to .7182. Its retracement zone at .7007 to .6966 is the most important near-term support.
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 pivot at .7123.
A sustained move over .7123 will indicate the presence of buyers. If this creates enough upside momentum then look for a retest of the main top at .7182. This price is a potential trigger point for an acceleration to the upside.
A sustained move under .7123 will signal the presence of sellers. This could trigger a quick break into .7072 to .7064. The latter is a potential trigger point for an acceleration into the short-term 50% level at .7007.
A break under .7123 will also indicate that sellers are trying to form a potentially bearish secondary lower top. This price level is very important to watch as long as the Aussie remains between .7182 and .7064.
This article was originally posted on FX Empire
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