rba day 0 761025 is the key resistance to watch on audusd 2688272017

Later today at 0330 GMT, RBA will announce its latest monetary policy where the expectation is no change to its current record low policy interest rate at 1.5% for the sixth consecutive meeting.

The futures market only priced in a 3% chance of a 25bps cut for this meeting. Let us take a look at the AUD/USD from a technical analysis perspective

Short-term Technical outlook on AUD/USD

(Click to enlarge chart)

Key elements

• Since the swing low area of 0.7540 printed on last Friday, 03 March 2017, the AUD/USD has started to evolve into a bearish flag formation with its upper boundary now at 0.7625.
• The bearish flag resistance of 0.7625 also confluences with a Fibonacci cluster at 0.7610/25
• Based on Elliot Wave Principal and fractal analysis, the current up move in place since last Friday, 03 March 2017 late U.S. session is likely to be a minor degree corrective wave 4 with potential end target at 0.7610/25. Thereafter, the AUD/USD may resume its bearish impulsive down leg to trace out the minor degree wave 5 to complete an intermediate degree bearish down move cycle of a/ or 1/ in place since 23 February 2017 high of 0.7740.
• The hourly RSI oscillator remains bearish below its resisrtances.

Key levels (1 to 3 days)

Pivot (key resistance): 0.7610/25

Supports: 0.7540 & 0.7510

Next resistance: 0.76440 & 0.7654 (medium-term pivot)

Conclusion

As long as the 0.7610/25 short-term pivotal resistance holds, the AUD/USD is likely to see a continuation of its potential downleg to retest last Friday’s 03 March 2017 swing low area of 0.7540 before targeting the 0.7510 support (risk level for a potential multi-week rebound)

However, a clearance above 0.7625 may invalidate the preferred bearish tone to see a further squeeze up towards 0.7640 and even the medium-term pivotal resistance at 0.76540 (also the descending trendline from 23 February 2017 high. Click here for a recap on our medium-term outlook published last Friday, 03 March 2017.

Charts are from eSignal

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