Forex AUD / USD Technical Analysis – Main trend up, but trend down; The reaction to .7463 sets the tone

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The Australian dollar rose slightly early on Monday as traders again try to recover from last Thursday’s sell-off and potentially bearish reversal in closing prices.

Concerns over China’s Evergrande debt weigh on risk sentiment, as speculators betting on a rate hike earlier than expected by the Reserve Bank (RBA) helps support prices. The RBA’s decision last week to halt a massive sell-off of government bonds that had pushed yields up sharply is also weighing on prices.

At 11:02 am GMT, the AUD / USD is trading at 0.7468, down 0.0001 or -0.00%.

Technical analysis of the daily swing chart

The main trend is upward on the daily swing chart. However, the trend is downward after confirmation of the potentially bearish top of last Thursday’s closing price reversal.

A trade up to 0.7547 will cancel the reversal top of the closing price and signal a resumption of the uptrend. A move through .7226 will change the main downtrend.

The minor trend is also up. A trade through .7379 will change the minor downtrend. This will confirm the change in momentum.

The first minor range is 0.7379 to 0.7547. AUD / USD is currently straddling its 50% or pivot level at 0.7463.

The second minor range is 0.7324 to 0.7547. His 50% level at 0.7435 is the next target. If this level fails, check for acceleration in the support cluster to .7379.

Technical forecasts of the daily swing chart

The direction of AUD / USD early Monday will likely be determined by traders’ reaction to the pivot at 0.7463.

Bullish scenario

A sustained move above .7463 will indicate the presence of buyers. If that creates enough bullish momentum, look for a push towards 0.7499.

Exceeding 0.7499 will indicate that the buy is getting stronger. This could help extend the rally towards the main high at 0.7547.

Bearish scenario

A sustained move below .7463 will signal the presence of sellers. The first downside target is 0.7435.

Since the main trend is up, buyers could enter the first test of 0.7435. However, if it fails, look for downward acceleration with the .7379 pivot towards the next target.

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