James Hyerczyk
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The Australian Dollar is trading steady to better on Tuesday, shortly before the Reserve Bank of Australia (RBA) releases its interest rate and monetary policy decisions at 04:30 GMT.

Policymakers are expected to leave their benchmark interest rate at 0.1% and to back track on plans it announced on July 6 to begin tapering its bond market buying stimulus.

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At 03:31 GMT, the AUD/USD is trading .7365, up 0.0003 or +0.04%.

The news has been priced into the market for weeks as COVID cases surged in Australia, forcing the government to shutdown major cities. Traders have also priced in a contraction in the economy for the third quarter.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up last Thursday when the U.S. Dollar plunged on dovish chatter from Federal Reserve Chairman Jerome Powell.

A trade through .7414 will signal a resumption of the uptrend, while a move through .7317 will change the main trend to down.

The minor range is .7290 to .7414. The market is currently trading inside its retracement zone at .7352 to .7367.

Another potential resistance level is the long-term Fibonacci level at .7379.

The short-term range is .7503 to .7290. It retracement zone at .7397 to .7422 is also resistance. It stopped the rally last week at .7414.


Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday will be determined by trader reaction to .7352.

Bearish Scenario

A sustained move under .7352 will indicate the presence of sellers. This could lead to a quick test of .7329, followed by the main bottom at .7317. Taking out this level will change the main trend to down with .7290 the next likely target.

Bullish Scenario

A sustained move over .7352 will signal the presence of buyers. This could lead to a labored rally with potential resistance targets lined up at .7367, .7379, .7397, .7414 and .7422.

The short-term Fibonacci level at .7422 is the trigger point for an acceleration to the upside.

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