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  • AUD/USD is on the verge of a bullish extension ahead of the RBA today.
  • Bears, on the other hand, will be looking for opportunities from resistance. 

AUD/USD is holding at a monthly support structure and some upside is to be expected prior to a continuation of the downside correction of the monthly bullish impulse.

The following is a top-down analysis from both a swing trading and day trading perspective. 

Monthly chart

With the price testing the support structure, there is the scope that it will hold and result in a bullish extension.

However, failures to break old support turned resistance will potentially leave the market range bound before a break to the downside to targeting a full 38.2% Fibonacci retracement of the monthly bullish impulse. 

Weekly chart

There is some meanwhile resistance which could hold the bulls off and ultimately send the price lower.

Daily chart

The price made a recent lower low on a daily basis and has retraced to a 38.2% Fib. 

This exposes the downside for an extension of the bearish correction of the monthly bullish impulse. 

Alternatively, the price might extend the correction to the next structure up prior to failing and eventually falling. 

0.6945 comes in a first downside target based on the current corrections -0.272% Fibo. 

Day trading prospects

Meanwhile, into the Reserve Bank of Australia, the 1-hour chart is bullish above 0.7040 support and carving out a reverse head and shoulders on the 15-min time frame:

1-hour chart

15-min chart

Leading into the RBA event, there are a few hours left for a very modest upside target that comes in the 0.7060s based on a -0.272% Fibo of the hourly chart’s bullish impulse’s correction. 

However, on a break of 0.7067, according to a volume profile analysis, there is a voice of volume (resistance) all the way to 0.7103 high volume node before 0.7126 which is the point of control, (highest traded price volume), for the range between today since October 20th.