The tech is looking very strong on both sides of the AUDUSD trade, so can the RBA make a difference?
The AUDUSD charts make for some interesting reading from the H4 up to the monthly.
Here's some key standout levels from those charts.
Support has a strong looking area around 0.7500.
A support line from the May low comes in at 0.7490
That level has been a prior S&R level since last year
The 55 H4 ma sits at 0.7503, the 200 sits at 0.7495
The 100 dma is at 0.7488
Resistance around 0.7660/80 is piling up also.
May resistance line sits at 0.7680
Jan 2015 resistance line is at 0.7670
100 wma is at 0.7661
The area has been a struggle for buyers all this year
AUDUSD daily chart
But it doesn't end there. Support looks pretty strong down to 0.7400 (55 dma 0.7416, old S&R 0.7410) and the low 0.73's (200 dma 0.7326, 55 wma 0.7299). Resistance is in place higher up too. Strong looking resistance around 0.7720, the April highs around the 38.2 fib of June 2014drop at 0.7849, the 200 mma at 0.7877.
From a technical stand point, there's a lot of large levels, within a fairly tight range, which means the pair has a lot of work to do to see it move outside of those levels. Is it too much work for the RBA to have a real influence on? While a rate cut tomorrow may shock some, on its own it's unlikely to bring a huge move, maybe 100-200 pips top. If there is any real damage it will come from the RBA's message and whether it hits any big dovish or neutral notes.
It doesn't matter what we may think might happen, the key is to just watch the levels and the price. If it breaks then we look to go with it. If it holds we trade that accordingly. At the end of the day it doesn't matter what the RBA says or does, the price will go where the price will go and all we can do is follow the charts and let them tell us how to trade it.
