The Aussie dollars holding within a narrow range on Monday, below 0.8000 barrier, after spiking to fresh multi-month high at 0.8065 last week.
The pair remains in an uptrend from mid-May low at 0.7328, with stronger acceleration that started in early July, boosted by weaker dollar and higher commodity prices.
Three consecutive strong bullish weeks and ending the second straight month in bullish mode, signal further advance, which requires eventual weekly close above 0.8000 barrier, reinforced by falling weekly 200SMA.
Meanwhile, the pair may extend consolidation and dip lower on negative signal from daily RSI bearish divergence and the indicator’s reversal from overbought territory.
Break below initial support, provided by rising 10SMA (currently at 0.7952) which contained last week’s downside attempts, would generate bearish signal and risk extension towards next strong supports at 0.7877 (daily higher base / Fibo 38.2% of 0.7572/0.8065 upleg) and 0.7809 (rising 20SMA).
Focus is on RBA’s interest rates decision on Tuesday with the central bank widely expected to keep interest rates unchanged at 1.5%.
Markets will be also watching RBA’s Monetary Policy statement on Friday, as hawkish tone of the statement would further boost Australian currency.
Res: 0.7989, 0.8000, 8065, 0.8100
Sup: 0.7952, 0.7900, 0.7877, 0.7809
