AUD/USD Into Support Ahead of RBA Interest Rate Decision
- AUDUSD testing support ahead of RBA
- Release to threaten immediate short-bias
- Updated targets & invalidation levels
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: AUDUSD reversed off slope resistance last week with the broader long-bias at risk near-term heading into tonight’s Reserve Bank of Australia (RBA) interest rate decision. The pair is now testing support at 7590-7606- a region defined by the 61.8% extension of the decline off the highs and the April low-day close. A break below confluence support at 7559 is needed to validate a more significant near-term reversal in the pair targeting 7510 & 7481/82.
Interim resistance stands at 7638/43 with a breach above the weekly opening-range highs at 7677 targeting last week’s high at 7722. Keep in mind that longer-dated slope resistance extending off the October high converges on this level heading deeper into the week with the broader long-bias at risk while below this mark. Ideally I would be looking for a final rally to fail just above the highs to offer favorable short entries. A breach / close above keeps the focus higher targeting the June high-day close at 7794. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of SuccessfulTraders” series.
- The DailyFX Speculative Sentiment Index (SSI) has held a net-short position since March 1st with the ratio standing at -1.23 (59% of traders are long- up from 54% the previous day)
- The ratio has continued to narrow after hitting an extreme of -2 last month, suggesting that the retail short-bias may be waning (bearish near-term)
- Open interest is 5.1% lower than yesterday and 12.2% below its monthly average heading into the RBA tonight
Why and how do we use the SSI in trading? View our video and download the free indicator here
Relevant Data Releases This Week
Other Setups in Play:
- Webinar: Start of Month, Quarter Yields Fresh Scalp Opportunities
- USDOLLAR Braces for NFPs- Rally to Offer Favorable Short Entries
- USDOLLAR at Cross Roads Heading Into 2Q- Initial Support 11970
- Webinar: Month / Quarter End Setups- USD Crosses in Play Ahead of NFP
- AUD/USD in Correction- 7590 Key Resistance
Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016
---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.