AUD/USD Forex Technical Analysis – Buyers Defending .7226 as US Holiday Week Begins with Below Average Volume

view original post

The Australian Dollar is edging higher on Monday in a cautious trade driven by concerns over demand for oil and other commodities amid a resurgence of pandemic curbs in Europe. On top of that, disappointing earnings in China reinforced worries about slowing growth in the world’s second-largest economy.

At 09:13 GMT, the AUD/USD is trading .7252, up 0.0017 or +0.23%.

Helping to keep a lid on prices are renewed concerns over COVID-19 after parts of Europe extended lockdowns to contain a fresh wave of infections. The prospect of oil releases from strategic reserves held in the U.S., China, India and Japan also weighed on the Aussie.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7227 will signal a resumption of the downtrend. A move through .7431 will change the main trend to up.

The minor trend is also down. A trade through .7371 will change the minor trend to up. This will also shift momentum to the upside.

On the downside, potential targets are the October 26 main bottom at .7226, the September 29 main bottom at .7170 and the August 20 main bottom at .7106.

On the upside, the nearest resistance is the Fibonacci level at .7318, followed by a pair of 50% levels at .7363 and .7392.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7235.

Bullish Scenario

A sustained move over .7235 will indicate the presence of buyers. If this creates enough upside momentum then look for a test of .7291. Taking out this level will indicate the buying is getting stronger. This could trigger a surge into .7318.

Bearish Scenario

A sustained move under .7235 will signal the presence of sellers. The next downside target is .7226. This is a potential trigger point for an acceleration to the downside with .7170 the next potential downside target.

Side Notes

This is a holiday week in the United States so don’t be surprised by below average volume.