AUD/USD Scalp Targets Ahead of RBA- Watch 7590

AUD/USD Scalp Targets Ahead of RBA- Watch 7590 -

Talking Points

  • AUD/USD rebound at risk ahead of RBA Interest Rate Decision
  • Support 7590- bearish invalidation at 7724
  • Updated targets & invalidation levels

AUDUSD 30min

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: The Aussie is responding to confluence support at 7590 , a region we have been tracking (ironically) since the last RBA interest rate decision . This level is defined by the April 2015 low-day close and converges on a median-line extending off the March high just lower.

The pair is now approaching interim resistance at 7656/60 and is backed by 7690 - 7706 with our near-term bearish invalidation level set at the 61.8% retracement at 7724 . Ultimately we're looking for a rally to sell with a break below the proposed pitchfork off the lows targeting 7590 and a basic trendline support extending off the January low, currently around 7555/60 . A break here would be needed to mark the next leg down targeting 7530 & 7491 .

Keep in mind expectations are split heading into tonight's Reserve Bank of Australia interest rate release release with the risk remaining on the side of a 25 basis points cut (meaning the consensus is slightly leaning towards a hold at 2% - but not by much). Either way, the central bank is likely to continue to increase their rhetoric in an attempt to talk down the currency and we would be looking for a rally to offer favorable short entries while below 7700. Continue tracking this setup and more throughout the week- Subscribe to SB Tra d e D e sk and take advantage of the DailyFX New Subscriber Discount!

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  • A summary of the DailyFX Speculative Sentiment Inde x (SSI) shows traders remain net long the Aussie, suggest ing that the rebound remains at risk heading into the release .
  • The ratio stands at +1.01 (50% of traders are long- up 0.3% from previous day)- weak reading
  • Open interest is 0.6 % higher than yesterday but remains 6 . 2 % below its monthly average.
  • The recent flip in the ratio at the highs suggests long-bias remains at risk ( bearish near-term )

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Relevant Data Releases This Week

Other Setups in Play:

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---Written by Michael Boutros, Currency Strategist with DailyFX

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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