AUSTRALIAN DOLLAR, ASX 200, RBA – Talking Points:
- Australian Dollar recoiled from 11-month trend resistance
- ASX 200 flirting with confirming bullish break out pattern
- RBA monetary policy decision might offer critical catalyst
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The Australian Dollar and its home country’s benchmark ASX 200 stock index are at pivotal technical barriers as all eyes turn the RBA monetary policy announcement. The central bank is seen keeping the Cash Rate unchanged at 0.75 percent, but traders will keenly parse the accompanying statement for direction cues.
The Australian Dollar retreated below resistance-turned-support in the 0.6883-95 area, invaliding what appeared to be a break of double-top resistance. That follows a mere three days spent menacing the outer boundary of the downtrend defining price action since late 2018.
A daily close below rising trend line support defining the series of higher lows since early October – now at 0.6838 – would suggest the next of the structural decline is at hand. Near-term selling pressure is likely to be neutralized if the pair manages a lasting foothold above trend resistance, currently at 0.6935.
Daily AUD/USD chart created with TradingView
Positioning in Australia’s benchmark ASX 200 stock index is similarly eye-catching. Prices are hovering within a hair of what could be the top a Symmetrical Triangle pattern. If confirmed on a daily close above the 6775.60, the setup would carry bullish continuation implications.
Initial resistance thereafter is at 6875.50, the July 30 high, though the measured upward move implied by the Triangle’s bounds would be expected to bring the index substantially higher. Support begins in the 6604.20-34-70 area but clearing the 6500 figure is probably needed to invalidate bullish cues in earnest.
Daily ASX 200 chart created with TradingView
AUD/USD, ASX 200 TRADING RESOURCES
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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