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AUD/USD Forex Technical Analysis – Trader Reaction to .7352 Sets the Tone Ahead of Tuesday’s RBA Decision

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·2-min read
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The Australian Dollar is trading steady-to-lower early Monday as traders square positions ahead of Tuesday’s Reserve Bank of Australia (RBA) policy meeting. Traders expect policymakers to leave interest rates unchanged and to back track on their previously announced plans to begin tapering its current bond stimulus.

At 05:32 GMT, the AUD/USD is trading .7345, down 0.0003 or -0.03%.

Bloomberg is saying that 18 economists surveyed last week expect the RBA to put off until later in the year plans to scale back weekly bond purchases, while keeping the cash rate at 0.1%. The surge in coronavirus cases in the country as well as government imposed lockdowns and restrictions are the catalysts behind the move.

Daily AUD/USD
Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7317 will change the main trend to down. A move through .7414 will signal a resumption of the uptrend.

The AUD/USD is currently trading on the weak side of a major retracement zone at .7379 to .7499. This zone is controlling the longer-term direction of the Forex pair.

The minor range is .7290 to .7414. Its pivot at .7352 is acting like resistance early Monday.

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

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Monday is likely to be determined by trader reaction to .7352.

Bearish Scenario

A sustained move under .7352 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into .7317. Taking out this level will change the main trend to down. This could trigger an acceleration into the next main bottom at .2790.

Bullish Scenario

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

Taking out .7414 will change the main trend to up, but don’t expect an acceleration to the upside unless buyers can take out .7422 with conviction.

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

This article was originally posted on FX Empire

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