Falling trendline intact ahead of the RBA rate decision

  • For the AUD, the path of least resistance remains to the downside, as indicated by the falling trendline on the hourly chart.
  • The pair looks set to re-test Friday’s low of 0.7166 and could see deeper losses if the Reserve Bank of Australia adopts a dovish stance.
  • Many in the markets do expect the central bank to turn dovish, courtesy of the recent developments: rise in mortgage costs for Australian holders, weak economic data and escalating trade tensions. As a result, a corrective rally above the falling trendline could be seen if the RBA retains the neutral stance.  

Hourly Chart

Spot Rate: 0.7190

Daily High: 0.715

Daily Low: 0.7187

Trend: Bullish above trendline

Resistance

R1: 0.7210 (50-hour moving average)

R2: 0.7243 (resistance as per the hourly chart)

R3: 0.7277 (10-day moving average)

Support

S1: 0.7166 (recent low)

S2: 0.7145 (May 32016 low)

S3: 0.71 (psychological level)