AUD/USD Forex Technical Analysis – Rangebound but Bullish Over .8053; Bearish Under .7928

James Hyerczyk
Updated
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The AUD/USD closed higher on Tuesday after the release of the Reserve Bank of Australia minutes, but remained rangebound as investors prepared for Wednesday’s U.S. Federal Reserve pronouncements.

The minutes from the Reserve Bank of Australia’s (RBA) September policy meeting were broadly in line with the market’s expectations. However, committee members did make specific mention of how continued strength in the Australian Dollar could hamper growth.

AUDUSD
Daily AUDUSD

“The appreciation of the Australian Dollar over recent months, driven in part by a broad depreciation of the U.S. Dollar, was weighing on domestic growth and contributing to subdued inflationary pressure,” the central bank said.

Additionally, “A further appreciation of the Australian Dollar would be expected to result in a slower pick-up in growth and inflation.”

Aussie traders expect U.S. central bank policymakers to leave its benchmark interest rate unchanged and to announce that they will reduce monthly bond purchases starting in October, and also leave the door open for an interest rate hike at their December 12-13 meeting.

Technically, the main trend is down according to the daily swing chart. The trend turned down on Monday when sellers took out the swing bottom at .7955. A trade through .8035 will change the main trend to up.

The price action is also being controlled by a pair of retracement zones.

The main range is .7807 to .8124. Its retracement zone at .7965 to .7928 is currently acting like support. The bottom at .7939 fell just short of the Fibonacci level at .7928.

The short-term range is .8124 to .7939. Its retracement zone is .8032 to .8053. This zone is currently resistance.

If the Fed is dovish in its message then buyers will try to drive the AUD/USD through the main top at .8035 and the retracement zone.

If the Fed delivers a hawkish message then AUD/USD sellers will try to drive the Forex pair through .7928.

This article was originally posted on FX Empire

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