AUD/USD Forex Technical Analysis – Strengthens Over .7786, Weakens Under .7733The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the retracement zone at .7786 to .7733.
The Australian Dollar is edging lower early Tuesday as investors looked to guidance from the Reserve Bank (RBA). The central bank will release the results of its monthly policy meeting at 03:30 GMT. Investors are widely expecting it to reinforce its forward guidance for three more years of near-zero rates, while also addressing the market dislocation.
At 02:41 GMT, the AUD/USD is trading .7750, down 0.0023 or -0.30%.
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Last week, the Aussie suffered its biggest plunges in a year amid a hefty sell-off in global bond markets. On Monday, the RBA doubled down on bond purchases, spurring the biggest drop in yields in year as policymakers around the world seek to check runaway bets on reflation.
The RBA announced plans to buy more than US$3 billion of longer-dated securities, following up on a surprise boost in purchase of shorter-maturity debt at the end of last week.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down on February 25. A trade through .7692 will signal a resumption of the downtrend. The main trend will change to up on a move through the last swing top at .8007.
The short-term range is .7564 to .8007. The AUD/USD is currently trading inside its retracement zone at .7786 to .7733. This zone is controlling the near-term direction of the Forex pair.
The minor range is .8007 to .7692. Its retracement zone at .7849 to .7887 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.
Daily Swing Chart Technical Forecast
The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the retracement zone at .7786 to .7733.
A sustained move over .7786 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a rally into .7850 to .7887.
Sellers are likely to come in on the first test of .7850 to .7887. They are going to try to form a potentially bearish secondary lower top.
A sustained move under .7733 will signal the presence of sellers. The first downside target is .7692. This is a potential trigger point for an acceleration to the downside with .7564 the next likely target.
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