AUD/USD Forex Technical Analysis – Strengthens Over .7192, Weakens Under .7176

The Australian Dollar is moving higher on Tuesday after the central bank reaffirmed the outlook for steady policy. Minutes of the Reserve Bank of Australia’s (RBA) August policy meeting showed the board saw no need to adjust its stimulus package at the moment, but was ready to ease again if needed.

At 06:49 GMT, the AUD/USD is trading .7229, up 0.0014 or +0.19%.

Investors were also relieved by a delay in the review of the U.S.-China trade deal this week, which has left the agreement standing and reinforced a belief that the trade relationship can hold even amidst conflict on multiple other fronts.

Volume is also a little on the light side as investors await the release of the minutes from the Fed’s July meeting. They’ll be looking for clues about an anticipated shift in the policy outlook.

According to Reuters, speculation is rife the U.S. central bank will adopt an average inflation target, which would seek to push inflation above 2% for some time to make up for the years it has run below.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7243 will signal a resumption of the uptrend. The main trend will change to down on a trade through .7109.

The minor trend is also up. A move through .7132 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is .7243 to .7109. Its retracement zone at .7176 to .7192 is support. Trading on the strong side of this zone is helping to generate today’s strong upside bias.

The main range is .6833 to .7243. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at .7038 to .6990.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .7229, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the short-term retracement zone at .7192 to .7176.

Bullish Scenario

A sustained move over .7192 will indicate the presence of buyers. If this move is able to continue to generate enough upside momentum then look for an eventual test of the main top at .7243. This is a potential trigger point for an acceleration to the upside with the next major target the December 3, 2018 main top at .7394.

Bearish Scenario

A sustained move under .7176 will signal the presence of sellers. This could trigger a quick break into the minor bottom at .7132. Momentum will shift to the downside if this level fails as support. The main trend changes to down on a move through .7109.

Side Notes

Keep your power dry if the AUD/USD falls inside .7192 to .7176. You could get chopped up while traders decide which way they want to take the Forex pair.

For a look at all of today’s economic events, check out our economic calendar.