Aussie Bull Market Set to Strengthen on Breakout Over .7617

The Australian Dollar is trading at its highest level since June 23, 2021 on Tuesday after the Reserve Bank of Australia (RBA) signaled it was moving closer to raising interest rates.

The Aussie is strengthening after policymakers dropped the pledge to be “patient” on tightening policy, while holding the key rate at a record low for now, as was widely expected.

At 06:17 GMT, the AUD/USD is trading .7608, up 0.0064 or +0.85%. On Monday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $74.76, up $0.36 or +0.49%.

“The Board has wanted to see actual evidence that inflation is sustainably within the 2 to 3 percent target range before it increases interest rates,” said RBA Governor Philip Lowe. “Inflation has picked up and a further increase is expected, but growth in labor costs has been below rates that are likely to be consistent with inflation being substantially at target.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out three main tops including the October 28, 2021 main top at .7556, the July 6, 2021 main top at .7599 and the June 25, 2021 main top at .7617.

The main range was formed by the May 10, 2021 main top at .7891 and the January 28 main bottom at .6967. The AUD/USD is currently trading on the strong side of its retracement zone at .7538 to .7429, making it support.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7544.

Bullish Scenario

A sustained move over .7544 will indicate the presence of buyers. Taking out the intraday high at .7618 will signal a resumption of the uptrend.

The daily chart indicates there is plenty of room to the upside with the June 11, 2021 main top at .7776 the next target.

Bearish Scenario

A sustained move under .7544 will signal the presence of sellers. Crossing to the weak side of the Fibonacci level at .7538 will indicate the selling pressure is getting stronger with potential downside targets coming in at .7456 and .7429.

A close under .7544 will form a potentially bearish closing price reversal top.