AUD/USD Technical: Hovering below the 200-day moving average as RBA looms

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<li><strong>AUD underperformed among the major currencies against the USD from 27 to 28 July 2023 ex-post FOMC, ECB, and BoJ.</strong></li>
<li><strong>Split view among economists and interest rates traders on RBA monetary policy decision today.</strong></li>
<li><strong>Short-term bearish downside momentum at this juncture as the AUD/USD failed to trade above the 200-day moving average.</strong></li>
<li><strong>Key short-term resistance on AUD/USD is at 0.6740.</strong></li>
</ul>
<p>This is a follow-up analysis of our prior report, <em>“AUD/USD Technical: Rebounded right at 200-day moving average” </em>published on 25 July 2023. Click <a href="https://marketpulse.com/forex/aud-usd-technical-rebounded-right-at-200-day-moving-average/kwong">here</a> for a recap.</p>
<p>The <a href="https://www.oanda.com/sg-en/trading/instruments/aud-usd/">AUD/USD</a> staged a rebound thereafter and reached an intraday high of 0.6821 on 27 July, just shy of the 0.6835 intermediate before it staged a bearish reversal and shed -198 pips ex-post FOMC, ECB, and BoJ to print an intraday low of 0.6623 on last Friday, 28 July.</p>
<p>The Aussie has underperformed among the major currencies against the US dollar in the last two trading days of last week where the AUD/USD recorded an accumulated loss of -1.68% from 27 July to 28 July versus EUR/USD (-0.63%), GBP/USD (-0.71%), and JPY/USD (-0.65%) over the same period.</p>
<p>The weak performance of the AUD/USD is likely to be attributed to the wishy-washy monetary policy guidance of the Australian central bank, RBA that led to a split forecast among economists and traders for today’s RBA monetary policy decision.</p>
<h2><strong>Split view among economists and traders on RBA decision</strong></h2>
<p>According to polls, the consensus among economists is calling for a hike of 25 basis points hike to bring the policy cash rate to 4.35% after a pause in the previous meeting in July. In contrast, data from the ASX 30-day interbank cash rate futures as of 31 July 2023 has indicated a patty pricing of only a 14% chance of a 25-bps hike, down significantly from a 41% chance priced a week ago.</p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38.png"><img loading="lazy" class="alignnone wp-image-806744 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38-1024×600.png" alt="" width="700" height="410" srcset="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38-1024×600.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38-300×176.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38-768×450.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_09-36-38.png 1486w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 1: AUD/USD medium-term trend as of 1 Aug 2023 (Source: TradingView, click to enlarge chart)</p>
<p>From a technical analysis standpoint, the price actions of the AUD/USD are still trapped within a major sideway range configuration with its range resistance and support at 0.6930 and 0.6580 respectively.</p>
<h2><strong>Short-term momentum has turned bearish</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50.png"><img loading="lazy" class="alignnone wp-image-806745 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50-1024×600.png" alt="" width="700" height="410" srcset="https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50-1024×600.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50-300×176.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50-768×450.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/07/AUDUSD_2023-08-01_10-03-50.png 1486w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 2: AUD/USD minor short-term trend as of 1 Aug 2023 (Source: TradingView, click to enlarge chart)</p>
<p>The AUD/USD has managed to stage a minor rebound of 117 pips from its last Friday, 28 July intraday low of 0.6622 in conjunction with an oversold reading seen in the hourly RSI oscillator on the same day.</p>
<p>Interestingly, the minor rebound has challenged and retreated at the key 200-day moving average yesterday, 31 July during the US session (printed an intraday high of 0.6739). Right now, the hourly RSI oscillator has broken below its ascending support after it hit an overbought condition yesterday which indicates that short-term momentum has turned bearish.</p>
<p>Watch the 0.6740 key short-term pivotal resistance to maintain the bearish tone, and a break below 0.6625 intermediate support exposes the major range support of 0.6600/6580.</p>
<p>However, a clearance above 0.6740 negates the bearish tone to see the next resistance at 0.6835 in the first step.</p>