Chart of the day AUDUSD potential mean reversion rebound as RBA looms

Short-term technical outlook on AUD/USD (Tues 03 Jul)

Key technical elements

The on-going medium-term down trend of the AUD/USD in place since Jan 2018 high of 0.8135 is now showing signs that its downside momentum has started to abate.
The daily RSI oscillator has started to flash a bullish divergence signal (2 weeks since 20 Jun 2018) at its oversold region. In addition, the price action of AUD/USD on the shorter-term hourly chart has traced out a minor bullish reversal chart configuration, “Descending Wedge” that has taken form since 19 Jun 2018 low of 0.7357.
The lower limit of the minor “Ascending Wedge” is now acting as a support at 0.7300 which confluences with a higher degree support zone of 0.7330 that is defined by a Fibonacci retracement/projection cluster and the 09/10 May 2017 medium-term swing low area (see daily chart).

Key Levels (1 to 3 days)

Pivot (key support): 0.7300

Resistances: 0.7400 & 0.7450

Next support: 0.7240/7220

Conclusion

Therefore as long as the 0.7300 pivotal support holds, the AUD/USD may see a minor mean reversion rebound to test the upper limit/resistance of the minor “Descending Wedge” at 0.7400 and a break above it sees a further potential push up to target the next intermediate resistance at 0.7450

On the other hand, failure to hold at 0.7300 sees a continuation of its medium-term down move towards the next support at 0.7240/7220 (the lower boundary of the aforementioned medium-term descending channel).

Charts are from eSignal

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