The Australian Dollar is under pressure early Monday as the U.S. Dollar inched higher, global stock markets struggled and oil prices fell as a U.S.-China spat over the origin of the coronavirus put the brakes on optimism about an economic re-start as countries around the world ease restrictions.
It seems to be coming down to lower demand for risk with U.S. stock futures down 1.7% and U.S. crude off by 7%. Meanwhile, the safe-haven U.S. Dollar rallied to a one-week high against the risk sensitive Australian Dollar.
The catalysts behind the price action are Friday’s bleak U.S. economic data and the threat of a fresh trade-war between the United States and China.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At 05:29 GMT, the AUD/USD is trading .6382, down 0.0039 or -0.60%.” data-reactid=”15″>At 05:29 GMT, the AUD/USD is trading .6382, down 0.0039 or -0.60%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on April 30.
A trade through .6570 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at .6254.
The short-term range is .6254 to .6570. Its 50% level or pivot at .6412 is controlling the short-term direction of the Forex pair.
The main range is .6685 to .5510. Its retracement zone at .6236 to .6097 is the next major downside target. This zone is controlling the near-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 short-term pivot at .6412.
A sustained move under .6412 will indicate the presence of sellers. If this move is able to generate enough downside momentum then look for an eventual break to .6254 to .6236. Since the main trend is up, buyers are likely to come in on a test of this area.
A sustained move over .6412 will signal the presence of buyers. This could trigger a rally to .6472, followed by a retest of the main top at .6570.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”38″>This article was originally posted on FX Empire
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