Aussie Dollar Consolidates Ahead of Central Bank Meeting Minutes

The Australian Dollar (AUD) plunged against the US Dollar (USD) on Monday, decreasing the price of AUDUSD to less than 0.7600 ahead of the Reserve Bank of Australia’s monetary policy minutes. The technical bias shall remain bullish because of a higher high in the ongoing upside rally.

Technical Analysis

As of this writing, the pair is being traded around 0.7587. A hurdle can be noted near 0.7602, the 61.8% fib level as well as pink trendline ahead of 0.7667, the trendline resistance on the higher timeframe and then 0.7680, a major horizontal resistance.  A break and hourly closing above the 0.7680 resistance shall incite renewed buying interest, validating a move towards the 0.7800 resistance zone.

On the downside, a support can be noted around 0.7577, the 50% fib level ahead of 0.7500, the short-term horizontal support and then 0.7159, the swing low of the last major downside move on higher timeframes. The technical bias shall remain bullish as long as the 0.7450 support area is intact.

How AUDUSD Reacted on Past RBA Minutes?

Last time the RBA released its minutes on 21st March, 2017. The AUD/USD pair fell broadly after the release of February minutes as the central bank indicated lower interest rate for a longer period of time.

The pair, however, rose by more than 50 pips after the release of January 2016 RBA minutes as the central bank signaled no rate cut in near future.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair around current levels may be a good strategy in short to medium term.

What Assets to Trade

In addition to AUD/USD, trading EURAUD, AUDJPY, GBPAUD and AUDCHF can be a good strategy as the aforementioned pairs are highly reactive to the RBA monetary policy announcement.

 

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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