Increased demand for risky commodity currencies is helping to boost the Australian Dollar on Monday, however, gains are being capped by a stronger U.S. Dollar. Position-squaring ahead of Tuesday’s Reserve Bank of Australia (RBA) monetary meeting could also be providing some support.
After opening flat, the Aussie rallied after U.S. President Donald Trump on Sunday expressed hope that the United States was seeing a ‘leveling-off” of the virus crisis in some of the nation’s hot spots. The commodity-linked currency was also supported by a rebound in crude oil prices.
Oil prices dropped about 9% during the early session on Monday but began an impressive intraday turnaround after Kirill Dmitriev of the Russian Direct Investment Fund told CNBC’s “Capital Connection” on Monday that Russia and Saudi Arabia are “very close” to a deal.
At 08:29 GMT, the AUD/USD is trading .6050, up 0.0056 or +0.94%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6213 will change the main trend to down. A move through .5980 will signal a resumption of the downtrend.
The main range is .6685 to .5510. Its retracement zone at .6098 to .6236 is the primary upside target and resistance. This zone stopped the selling at .6213 on March 31. It’s also controlling the near-term direction of the Forex pair.
The short-term range is .5510 to .6213. Its retracement zone at .5861 to .5778 is the primary downside target and potential support area.
Daily Technical Forecast
Based on the early price action and the current price at .6050, the direction of the AUD/USD the rest of the session on Monday is likely to be determined by trader reaction to the uptrending Gann angle at .5990. This angle provided support earlier in the session.
A sustained move over .5990 will indicate the presence of buyers. The first upside target is a 50% level at .6098. Overcoming this angle will indicate the buying is getting stronger with potential targets coming in at .6213 and .6236.
A sustained move under .5990 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the short-term 50% level at .5862.
This article was originally posted on FX Empire
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