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AUD/USD Forex Technical Analysis – Weakens Under .6783, Strengthens Over .6785

James Hyerczyk

The Australian Dollar is trading lower on Monday after posting a solid gain on Friday in response to the announcement of a partial trade deal between the United States and China. Data from China, Australia’s biggest trading partner, brought grim news with its September exports falling 3.2 percent from a year ago, while imports dropped 8.5 percent. Economists had expected exports to fall by 3 percent and imports to decline by 5.2 percent.

At 06:38 GMT, the AUD/USD settled at .6776, down 0.0017 or -0.26%.


Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Friday when buyers took out the previous main top at .6774.

Buyers also took out .6775, which was the highest level it reached after the Reserve Bank of Australia cut its benchmark interest rate on October 1.

The main trend will change to down on a trade through .6710.

The short-term range is .6895 to .6671. Its retracement zone at .6783 to .6809 provided resistance on Friday when the rally stopped slightly above the upper or Fibonacci level at .6811.

Daily Technical Forecast

Based on the early price action and the current price at .6776, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the resistance cluster at .6783 to .6785.

Bearish Scenario

A sustained move under .6783 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the nearest uptrending Gann angle at .6751. Since the main trend is up, buyers could come in on the first test of this angle.

If .6751 fails as support then look for the selling to possibly extend into the support cluster at .6711 to .6710.

Bullish Scenario

A sustained move over .6785 will signal the presence of buyers. The first upside target is a resistance cluster formed by the short-term Fibonacci level at .6809 and last week’s high at .6811.

Overtaking .6811 will indicate the buying is getting stronger. This could trigger an acceleration into an uptrending Gann angle at .6831 and a downtrending Gann angle at .6840.

This article was originally posted on FX Empire