The Australian Dollar (AUD) fell broadly against the US Dollar (USD) on Tuesday, dragging the price of AUDUSD to less than 0.7700 after the Reserve Bank of Australia (RBA) monetary policy minutes. The technical bias shall remain bullish because of a higher high in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded around 0.7663. A support can be noted around 0.7600, the psychological number ahead of 0.7468, the confluence of 50% fib level as well as horizontal support area and then 0.7387, the trendline support area on bigger timeframes followed by 0.7159, the swing low of the last major downside move.
On the upside, a hurdle can be noted near 0.7700, the psychological number as well as trendline resistance ahead of 0.7726, the swing high of the last major upside rally as demonstrated in the give above daily chart. A break and daily closing above the 0.7726 resistance shall incite renewed buying interest, validating a move towards the 0.8000 resistance zone in long term. The technical bias shall remain bullish as long as long as the 0.7159 support area is intact.
RBA Monetary Policy Minutes
Australia’s third quarter contraction was likely a one-off, reflecting temporary forces that are not expected to continue into the December quarter, the Reserve Bank of Australia (RBA) said in its February 7 policy meeting. The 0.5% contraction in real GDP in the third quarter reflected “some temporary factors, including disruptions to coal supply and bad weather,” the minutes of the February policy meeting showed on Tuesday. “This weakness was not expected to have continued into the December quarter and the forecasts for quarterly GDP growth were little changed.” The Reserve Bank voted to leave monetary policy on hold at the February meeting, opting instead to wait for more evidence of growth and inflation. The overnight rate has held at a record low of 1.5% since August.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.