AUD/USD trading in key consolidation range ahead of major event risk- intraday levels to know
The Reserve Bank of Australia (RBA) interest rate decision is on tap tonight and Aussie is trading right in the middle of a multi-month consolidation pattern we’ve been tracking for weeks now. Here are the updated targets and invalidation levels that matter for AUD/USD heading into the release. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.
AUD/USD DAILY PRICE CHART
Technical Outlook: In my Weekly Technical Perspective on the Australian Dollar, we highlighted that the, “broader short-bias is vulnerable while above 7327. From a trading standpoint, we’re looking for a break of the 7327-7505 range for further guidance.” Aussie has continued to consolidate within the confines of the initial June opening range with major event risk on tap this week.
Resistance stands with the July trendline / May low-day close around ~7445/56 with critical support steady at 7327– a break / close below this level would expose subsequent support objectives at 7230 and 2017 open at 7200. Ultimately a breach above 7494 would be needed to suggest a more significant low is in place.
AUD/USD 240MIN PRICE CHART
Notes: A closer look at AUD/USD price action further highlights this consolidation pattern with the lower bounds of the range now converging on the key 7327/36 support zone- a region defined by the yearly low-day close and the 61.8% retracement of the 2016 advance. Initial resistance stands at the May lows at 7412backed by the trendline resistance and 7456.
Bottom line: We’re looking for a break of this consolidation range in Aussie with event risk this week likely to offer a catalyst in price. Specifically, looking for a reaction off the 7327/36 zone with the broader short-bias at risk while above this threshold. From a trading standpoint, I still favor fading weakness into this zone but RESPECT the break- IF we get it, it’s likely to be rather sharp and decisive.
