AUD/USD Forex Technical Analysis – Trader Reaction to .7275 Sets the Tone Ahead of Tuesday’s RBA Minutes

The Australian Dollar is trading directionless on Monday in a relatively low volume trade at the start of a big week that includes the RBA monetary policy minutes, a Federal Reserve monetary policy decision and Australian labor market data. Just like last week’s price action, the direction of the Aussie is also likely to be influenced by risk sentiment since it is considered a higher-yielding, higher-risk asset.

At 08:26 GMT, the AUD/USD is trading .7278, down 0.0004 or -0.06%.

The RBA minutes, due to be released on Tuesday at 09:30 GMT, are not expected to reveal anything new, although Governor Philip Lowe did note in his statement accompanying the meeting this month that the Board ‘continue to consider how further monetary measures could support recovery.’

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend changes to down on a trade through .7136. A move through .7414 will signal a resumption of the uptrend.

The minor trend is also up. A trade through .7325 will indicate the buying is getting stronger, while a move through .7192 changes the minor trend to down. This will also shift momentum to the downside.

The AUD/USD is also trapped between a pair of retracement levels, which is contributing to the choppy, two-sided trade. On the upside, the resistance levels are .7303 and .7329. The potential support levels are .7275 and .7242.

Daily Swing Chart Technical Forecast

Based on the early trade, the direction of the AUD/USD is likely to be determined by trader reaction to the 50% level at .7275.

Bullish Scenario

A sustained move over .7275 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extent into another 50% level at .7303, followed by .7325 and a Fibonacci level at .7329. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .7275 will signal the presence of sellers. This could trigger a break into a Fibonacci level at .7242. This is a potential trigger point for an acceleration into the minor bottom at .7192.