AUD/USD Forex technical analysis

The RBA standing still naturally saw a pop in the aussie dollar but not enough to see it break the recent ranges.

From 0.7835-45 there's multiple resistance points going back through Feb which is doing a job of keeping the topside contained in most instances.

AUD/USD H4 chart

Similarly on the downside we're being held up around the 0.7738 level

The range is pretty tight at the moment and we saw what happened in EUR/USD last week when a tight range broke. It was worth nearly 200 pips then and we're likely to see something along those lines when the aussie decides to move. The only difference between this and the euro is that the euro was very much hit on the dollar side and the aussie isn't reacting as much to USD.

The main drivers are what's happening in Australia and China. We're on the rate cut balance board between the PBOC easing and whether the RBA does also. PBOC cuts are seen as positive for the aussie economy and that seems to be offsetting anything the RBA wants to do. The big caveat is that the PBOC action has to develop into positive activity for Australia or they're going run into a brick wall. If that happens then this 'Chinese bid' is going to evaporate and we'll hit the downside hard.

Ultimately a break of 0.7700 suggests that we at least try the 0.76 lows once again and we're likely to go further if that happens. On the upside, gaining and holding 0.7900 is needed to give bulls a chance but I'd still want to see 0.80 challenged and the 38.2 fib of the 2014 fall at 0.8300.