Yahoo Finanza AUD/USD Forex Technical Analysis – Trader Reaction to .6941 Pivot Sets the Tone
The Australian Dollar is edging lower on Monday after an early rally fizzled following the release of weak economic data out of China. The news raised concerns over a global recession, pressuring the higher-risk currency.
Chinese retail sales sank 11.1% in April from a year earlier, far beyond forecasts of a 6.1% drop and testimony to how tough coronavirus lockdowns have been there. Additionally, industrial output also fell a steep 2.9% on the year, in a grim omen for resource demand.
The Asian giant is Australia’s biggest export market and the Aussie is often used as a liquid proxy for the Yuan, according to Reuters.
At 08:23 GMT, the AUD/USD is trading .6917, down 0.0021 or -0.30%. On Friday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $68.59, up $0.67 or +0.98%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6829 will signal a resumption of the downtrend. A move through .7266 will change the main trend to up.
The minor trend is also down. A new minor bottom at .6829 was confirmed overnight. A trade through .7053 will change the minor trend to up. This will also shift momentum to the upside.
The minor range is .7053 to .6829. The AUD/USD is currently straddling its pivot at .6941.
The second minor range is .7266 to .6829. Its retracement zone at .7048 to .7099 is the next upside target and potential resistance.
Daily Swing Chart Technical Forecast
The early price action indicates the direction of the AUD/USD on Monday will be determined by trader reaction to the pivot at .6941. ‘
Bullish Scenario
A sustained move under .6941 will indicate the presence of sellers. The first downside target is a minor level at .6894. This is the last potential support before the minor bottom at .6829, and a pair of long-term bottoms at .6811 and .6777.
Bearish Scenario
A sustained move over .6941 will signal the presence of counter-trend buyers. If this creates enough upside momentum then look for a near-term surge into the resistance cluster at .7048 to .7053.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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