AUD/USD Forex Technical Analysis – 50/50 Rate Cut Chance Means Strength Over .7030, Weakness Under .6967

The Australian Dollar is trading higher late in the session, recovering from early session weakness. Shortly after the opening on Monday, the Aussie retreated after President Trump tweeted he was increasing tariffs against China. Global equity markets weakened on the news as speculators bet the Chinese trade talk delegation would cancel its trip to Washington, thereby dampening the chances of a trade deal.

At 20:32 GMT, the AUD/USD is trading .6997, down 0.0027 or -0.36%.

Throughout the day, demand for risky assets rose after CNBC reported that the Chinese delegation was returning to Washington to resume the trade talks. The Australian Dollar also rebounded and is now in a position to close higher for the session.

Early Tuesday, the Reserve Bank of Australia will release its interest rate decision and monetary policy statements. Going into the session, traders place the chances of a rate cut at 50/50, so we’re likely to see a volatile response to the decision.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. It was reaffirmed on Monday. A trade through .7069 will change the main trend to up. A move through .6962 will signal a resumption of the downtrend.

The main range is .7394 to .6764. Its retracement zone at .7079 to .7153 is resistance.

The minor range is .6764 to .7296. The market is currently trading inside its retracement zone at .7030 to .6967.

Daily Swing Chart Technical Forecast

Based on Monday’s price action, the direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to the Fibonacci level at .6967.

Bullish Scenario

A sustained move over .6967 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the 50% level at .7030. Taking out this level will indicate the buying is getting stronger. This should trigger a further rally into the main top at .7069 and the major 50% level at .7079.

Bearish Scenario

A sustained move under .6967 will indicate the presence of sellers. Taking out .6962 will signal that the selling is getting stronger. The daily chart is wide open under this level with the January 3 bottom at .6764 the next likely downside target.