The daily AUD/USD sits around the 1.0420 to 1.0400 area which is the minor and major psychological level, respectively. This area also is near the 200DMA and together this support zone could be where the pair finds solid footing for the first swing entry of the fresh uptrend.
There are mixed messages about ultimately what will come from the RBA Tuesday. The RBA has taken their foot off the pedal as it regards rate cuts and the aussie strength since has reflected an unwinding of the short trade that carried over from the exhaustion from the early January highs just shy of the 1.0600 level.
Past performance is not indicative of future results
The daily AUD/USD has plenty of bullish sentiment and momentum behind as seen by the green GRaB candles but an established “twelve to two o’clock” trend still eludes it. If the 1.0400 level and the 200DMA can create a floor the recent bounce will be the first swing buy of the new uptrend and usher in bullish Directional Bias.
While I am focusing on the price action-based support of the 1.0400/1.0420 area and the technical support of the 200DMA (200 period SMA close on the daily), tonight’s action is pure fundamentals as traders will look to the message of the RBA’s statement.
There is not denying that the aussie economy is warming up but with lingering global concerns does the RBA date hint at tightening?
The hesitant nature of the yet-to-be established uptrend reflects that the RBA is still in “wait and see” mode and rates will remain at 3.00% for some time.
The aussie is pushed and pulled by two active schools of thought...