AUD/USD Forex Technical Analysis – RBA Surprise Decision Could Pressure Aussie into .7579 – .7523
The Australian Dollar gave up earlier gains on Tuesday after the Reserve Bank of Australia (RBA) surprised by expanding its bond buying stimulus while also hardening its commitment to keeping interest rates on hold for three more years.
At 07:45 GMT, the AUD/USD is trading .7615, down 0.0007 or -0.10%.
The Reserve Bank of Australia (RBA) held its cash rate at 0.1% as expected but wrong footed may by expanding its current bond buying program by another A$100 billion ($76.35 billion).
The present program is set to end in April and analysts had thought the RBA would wait another month or so before deciding whether to extend it.
Essentially, it boils down to…more stimulus weakens a currency.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through last Thursday’s low at .7592 will signal a resumption of the downtrend. A trade through .7764 will change the main trend to up.
The minor trend is also down. This is controlling the momentum. A trade through .7704 will change the minor trend to up and signal a shift in momentum.
The minor range is .7764 to .7592. Its 50% level at .7678 is resistance.
The short-term range is .7339 to .7820. Its retracement zone at .7579 to .7523 is the next downside target. Aggressive counter-trend buyers could come in on the first test of this retracement zone. However, taking out the lower or Fibonacci level at .7523 could trigger an acceleration to the downside.
Daily Swing Chart Technical Forecast
Look for the downside bias to continue on Tuesday as long as the AUD/USD remains under the pivot at .7678.
A sustained move under .7678 will indicate the selling pressure is getting stronger. This could trigger a break into .7592, followed closely by the short-term 50% level at .7579.
Look for a technical bounce on the first test of .7579. If it fails to hold, the AUD/USD could break sharply into .7523.
Overtaking .7678 will signal the presence of buyers. The first target is .7704. Taking out this level will change the minor trend to up and could trigger an acceleration into the main top at .7764. The main trend will change to up if buyers can take out this level.
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