- AUD/USD is chipping away at key ascending trendline support.
- Dovish tone of RBA’s minutes released Tuesday is likely hurting the AUD.
AUD/USD continues to lose altitude on dovish RBA expectations and is currently trading at a session low of 0.6842 – support of
the trendline connecting Nov. 29 and Dec. 10 lows.
The minutes of the Reserve Bank of Australia’s (RBA) December meeting released Tuesday showed the poliymakers thought simulus from rate cuts outweighed any negative impact on confidence and further steps (easing) could be taken, if required.
The dovish tone of the minutes reinforced expectations for a 25 basis point rate cut in February. As a result, the markets are offering Australian dollars.
The central bank has delivered three 25 basis point rate cuts this year. At press time, the official interest rate stands at a record low of 0.75%.
AUD/USD may attract stronger selling pressure over the next two days if the ascending trendline support is convincing breached on Wednesday. A breakdown will likely yield a sell-off to 0.6754 (Nov.29 low).
The case for a downside break of the trendline would weaken if the hourly chart resistance (lower high) at 0.6861 is breached.
Daily chart
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Trend: Bearish below rising trendline support
Technical levels
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