AUD/USD Forex Technical Analysis – Dovish RBA Minutes Could Drive Aussie into .7290, Followed by .7255

The Australian Dollar hit its lowest level since July 21 early Tuesday, pressured by the chance of fresh stimulus from the Reserve Bank of Australia (RBA) that drove 10-year bond yields to near seven-month lows.

The minutes from its August policy meeting showed on Tuesday that the RBA Board would be prepared to take policy action should coronavirus lockdowns across the country threaten a deeper economic setback. That outcome now looks more likely as the Delta variant spreads.

At 04:06 GMT, the AUD/USD is trading .7309, down 0.0026 or -0.36%.

Besides the dovish RBA minutes, the Aussie is also reacting to disappointing Chinese economic data while fast-growing outbreaks of COVID-19 threaten Australia’s largest cities with longer lockdowns.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7290 will reaffirm the downtrend. A move through .7427 will change the main trend to up.

The minor trend is also down. A trade through .7389 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is .7290 to .7427. Its retracement zone at .7359 to .7375 is the nearest resistance.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7335.

Bearish Scenario

A sustained move under .7335 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at .7290.

Taking out this level will reaffirm the downtrend with the November 19 main bottom at .7255 the next likely downside target.

Bullish Scenario

A sustained move over .7335 will signal the return of buyers. This could trigger an intraday short-covering rally into the short-term 50% level at .7359, followed by the resistance cluster at .7375 – .7379.