The Australian Dollar is trading lower on Monday is reaction to a drop in demand for riskier assets. Furthermore, weaker demand for metals such as copper are also weighing on the commodity-linked currency. Helping to fuel the weakness is the mixed U.S. Non-Farm Payrolls report released on Friday. The headline number was impressive, but wage gains slowed in March. This raised concerns about the strength of the U.S. economy.
At 05:33 GMT, the AUD/USD is trading .7092, down 0.0012 or -0.19%.
Positive progress towards a resolution of the U.S.-China trade dispute offered no support for the Aussie on Monday, but it may be softening some of the selling pressure.
Daily Technical Analysis
The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through .7052 will change the main trend to down. A move through .7168 will signal a resumption of the uptrend.
The minor trend is down. A move through .7131 will change the minor trend to up. This will also shift momentum to the upside.
The price action has been choppy and two-sided for over a month. This is being caused by a number of retracement levels. Until traders can shed these levels, the choppiness is likely to continue.
On the downside, the nearest 50% level comes in at .7079. On the upside, retracement level resistance is at .7105 and .7129.
Daily Technical Forecast
Based on the early price action, the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to a short-term uptrending Gann angle at .7092.
A sustained move over .7092 will indicate the presence of buyers. However, any rally is likely to be labored with potential resistance levels coming in at .7099, .7105 and a resistance cluster at .7108.
The key resistance is .7108. Taking out this level could trigger an acceleration to the upside with the next target zone .7129 to .7131.
A sustained move under .7092 will signal that the selling pressure is increasing. This could trigger a break into a 50% level at .7079, followed by a short-term uptrending Gann angle at .7072. If this Gann angle fails then look for the selling to possibly extend into a pair of uptrending Gann angles at .7062 and .7056.
The Forex pair looks like it’s getting ready to roll over to the downside. Sellers just need to drive the AUD/USD away from the retracement zones.
This article was originally posted on FX Empire