AUD/USD Forex Technical Analysis – Watch for Closing Price Reversal Bottom After RBA Minutes

Based on the early price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to Monday’s low at .6848.
James Hyerczyk

The Australian Dollar is trading flat ahead of the release of the Reserve Bank of Australia (RBA) minutes from its June 3 monetary policy meeting. At that meeting, the Board decided to lower the cash rate by 25 basis points to 1.25 percent. The Board made this decision to support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.

At 0:41 GMT, the AUD/USD is trading .6852, down 0.0001 or 0.01%.

Traders will be looking at the minutes for clues about the timing of future rate cuts. Based on the current six-day sell-off, traders are betting on a July rate cut. This assessment is being supported by last week’s disappointing Employment Rate report, which came in at 5.2, higher than the 5.1 forecast.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Monday when sellers took out the .6864 main bottom.

The main trend will change to up on a trade through .7022. This is highly unlikely, but the AUD/USD begins today’s trading session inside the window of time for a closing price reversal bottom. If confirmed, this chart pattern could trigger the start of a 2 to 3 day counter-trend rally.

The nearest upside target is the Fibonacci level at .6967.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to Monday’s low at .6848.

Bullish Scenario

A sustained move over .6848 will indicate the presence of buyers. Taking out Monday’s high at .6885 will make .6848 a new minor bottom. The move could trigger a strong short-covering rally.

Bearish Scenario

A sustained move under .6848 will signal the presence of sellers. If this move generates enough downside momentum then we could see a steep plunge towards the January 3 bottom at .6764.

Closing Price Reversal Bottom Set-up

Taking out .6848 then turning higher for the session will put the AUD/USD in a position to post a potentially bullish closing price reversal bottom. This will indicate the buying is greater than the selling at current price levels. If confirmed, this could lead to a 2 to 3 day short-covering rally.

Traders will also be positioning themselves ahead of the Federal Reserve monetary policy and interest rate decisions on Wednesday.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.