A head-and-shoulders forms in AUD/USD after five straight weeks of losses

<p>The RBA decision is about five hours away and Australian dollar bulls could certainly use a lifeline. Unfortunately, I don't see many paths today that. No change in the 4.35% cash target is coming today and I can't imagine some kind of shift back to rate hikes.</p><p>The market is pricing in fractional chance of a cut today and that rises to 50/50 by June. Even with a pushback against cuts, the market will easily dismiss it because so much could change between now and the June 18 meeting.</p><p>The best bet for the Australian dollar her is some kind of shift in China, which is something that I would argue is warranted. The problem is that it's been warranted for awhile and Beijing is asleep at the wheel. Holidays effectively start on Friday and continue for a week in China so it's now or we're waiting until mid-month at best.</p><p>Technically, the Dec-Jan lows initially gave way two weeks ago but it looked like it could be a false break. However the latest leg of USD strength has broken the double bottom again and teed up a nice head-and-shoulders pattern that points to 0.6200.</p><p>The October low near 0.6260 should offer some support but it's not a pretty picture.</p>

This article was written by Adam Button at www.forexlive.com.