AUD/USD Forex Technical Analysis – Strengthens Over .7318, Weakens Under .7266 – Yahoo Finance

This post was originally published on this site

The Australian Dollar is edging lower on Monday as vast coronavirus restrictions weighed on investor sentiment. Meanwhile traders were reassessing Friday’s speech by Federal Reserve Chairman Jerome Powell while pricing in the possibly that a hawkish shift toward tapering could put pressure on the antipodean currencies. Aussie traders were especially miffed by polls that showed a non-trivial chance the economy is already in a recession due to pandemic restrictions.

At 10:35 GMT, the AUD/USD is trading .7294, down 0.0016 or -0.22%.

To recap Friday’s events, in a highly expected speech, Federal Reserve Chair Jerome Powell on Friday said the bank was in no rush to tighten monetary policy but that it could start cutting its asset purchase program “this year”, if the economic recovery goes well.

Traders are looking for a most sideways-to-lower trade ahead of Wednesday’s Australian Quarterly GDP report. GDP is expected to come in 0.6% higher on a quarterly basis, down from a 1.8% gain the previous quarter.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned higher on Friday when buyers took out the previous top at .7280. A move through .7222 will change the main trend to down.

We’re going to be keeping an eye on the price action and order flow on a pullback into .7280. Trader reaction to this price will tell us if the buying is being fueled by new longs entering the market or by short-covering.

The short-term range is .7427 to .7106. The AUD/USD is currently testing its retracement zone at .7304 to .7266. This zone could become support if the buying is real.

The minor range is .7106 to .7318. Its retracement zone at .7212 to .7187 is potential support.

On the upside, the resistance is a longer-term retracement zone at .7379 to .7499.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7304.

Bullish Scenario

A sustained move over .7304 will indicate the presence of buyers. Taking out the intraday high at .7318 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for a possible drive into the long-term Fibonacci level at .7379.

Bearish Scenario

A sustained move under .7304 will signal the presence of sellers. The first downside target is .7266. Buyers could come in on the first test of this level. If it fails as support then look for the selling to possibly extend into .7222. This is followed by the retracement zone at .7212 to .7187.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE:

This post was originally published on *this site*