AUD/USD Forex Technical Analysis – Could Straddle .7499 Pivot Ahead of RBA, Fed Policy Announcements

The Australian Dollar is edging lower early Monday in a lackluster trade as investors position themselves ahead of Tuesday’s Reserve Bank (RBA) monetary policy decisions, but the Federal Reserve is the highlight of a week full of central bank meetings.

At 05:59 GMT, the AUD/USD is trading .7513, down 0.0008 or -0.11%.

The RBA is expected to leave its benchmark interest rate unchanged, but could make a few policy adjustments as inflation puts upward pressure on the rates outlook.

The Fed, which concludes a two-day meeting on Wednesday, is expected to say it will start to taper bond purchases, though the markets’ focus is on clues about the timing and frequency of its future rate hikes.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7556 will reaffirm the uptrend. A move through .7454 will change the main trend to down.

The first support is a long-term 50% level at .7499. This is followed by a pair of minor 50% levels at .7467 and .7440. The latter is a potential trigger point for a steep drop into a long-term Fibonacci level at .7379.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7499.

Bullish Scenario

A sustained move over .7499 will indicate the presence of buyers. If this move can generate enough upside momentum then look for a test of the recent high at .7556.

Overtaking .7556 will indicate the buying is getting stronger with the next upside targets the July 6 main top at .7599 and the June 25 main top at .7617.

Bearish Scenario

A sustained move under .7499 will signal the presence of sellers. This could lead to a labored sell-off with potential downside targets a 50% level at .7467, a main bottom at .7454 and another 50% level at .7440.

If .7440 fails as support then look for a possible acceleration to the downside with .7379 the next major target.