Investors shed risky assets on Monday, leading to a sell-off in the AUD/USD. Two tops at 1.0200 and 1.0257 helped form an emerging Triangle chart pattern, indicating selling pressure which could lead to a near-term correction.
Late in the trading session, this pair crossed a swing bottom at 1.0088, indicating a change in trend to down on the 240-minute chart. Based on the near-term range of .9943 to 1.0200, expectations are for a correction into 1.0072 to 1.0041. Buyers may resurface in this zone, triggering a short-covering rally which could lead to a test of the downtrending resistance line.
Given the distance between the support and resistance lines, traders can expect to see volatility or wide-range trading until this pair can establish either solid support or resistance. At this time, traders seem tentative which explains the developing lower-top, higher-bottom chart formation.
According to the 240-minute chart pattern, the main range is .9865 to 1.0200. This makes 1.0033 a key pivot area. Without a major catalyst driving this Forex pair in either direction, traders may become content with straddling this price until the support and resistance lines compress enough to indicate a breakout formation.
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