This is a continuation of our previous research, "AUD/USD Technical: Rebounded right at 200-day moving average," which was published on July 25, 2023. A summary can be found by clicking here.Following that, the AUD/USD staged a comeback, reaching an intraday high of 0.6821 on July 27, just shy of the 0.6835 intermediate, before staging a …
This is a continuation of our previous research, “AUD/USD Technical: Rebounded right at 200-day moving average,” which was published on July 25, 2023. A summary can be found by clicking here.
Following that, the AUD/USD staged a comeback, reaching an intraday high of 0.6821 on July 27, just shy of the 0.6835 intermediate, before staging a bearish reversal and dropping -198 pips ex-post FOMC, ECB, and BoJ to print an intraday low of 0.6623 on last Friday, July 28.
The Australian dollar outperformed the other major currencies against the US dollar in the last two trading days of last week, with the AUD/USD recording an aggregate loss of -1.68% from July 27 to July 28, compared to EUR/USD (-0.63%), GBP/USD (-0.71%), and JPY/USD (-0.65%) over the same time.
The AUD/USD’s poor performance is likely to be attributable to the Australian central bank’s ambiguous monetary policy advice, which has resulted in a split forecast among analysts and traders for today’s RBA monetary policy announcement.
The RBA decision has divided economists and traders.
According to polls, analysts agree on a 25 basis point raise to bring the policy cash rate to 4.35% after a pause at the previous meeting in July. Data from the ASX 30-day interbank cash rate futures as of 31 July 2023, on the other hand, show a modest pricing of only a 14% possibility of a 25-bps raise, down from a 41% chance priced a week ago.
Figure 1 depicts the medium-term trajectory of the AUD/USD as of August 1, 2023.
According to technical analysis, the AUD/USD price action is still locked within a major sideways range structure, with range resistance and support at 0.6930 and 0.6580, respectively.
The short-term momentum has shifted bearish.
Figure 2: The AUD/USD minor short-term trend as of August 1, 2023.
The AUD/USD has recovered 117 pips from its intraday low of 0.6622 on Friday, July 28th, in combination with an oversold reading in the hourly RSI oscillator on the same day.
Interestingly, the tiny comeback challenged and retreated at the crucial 200-day moving average during the US session yesterday, July 31 (reached an intraday high of 0.6739). The hourly RSI oscillator has currently broken below its ascending support after reaching an overbought situation yesterday, indicating that short-term momentum has shifted bearish.
Watch the 0.6740 key short-term pivotal resistance to maintain the bearish tone, and a break below 0.6625 intermediate support exposes the major range support of 0.6600/6580.
However, a clearance above 0.6740 negates the bearish tone to see the next resistance at 0.6835 in the first step.
Risk disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.
