Monday, July 04, 2016

AUD/USD – What Happens after the Rate Decision Announcement?



The new week for AUD/USD began with a 44 pips gap that was recovered only for a few hours. What is more, right after the beginning of the London trading session the pair continued rising and did not stop after the American trading session began, climbing with 92 pips for 18 hours.

Tomorrow the Reserve Bank of Australia with announce its rate statement for July, but financial analysists don’t expect a change this month. What direction will this pair take after the announcement? I would like us to focus on what the charts tell us.

You can clearly see that currently the pair is in a bullish trend, even though it is a corrective one.
The trendlines on the monthly time frame have formed a zone of a move to the upside, and in my personal opinion AUD/USD won’t stop climbing before it reaches the resistance trendline of the downwards channel (the purple line). I am deliberately avoiding mentioning any exact levels, since I am referring to the monthly time frame and it is difficult to make an exact prognosis. Despite that we are all aware of the influence trendlines have on the market as static levels of support and resistance that affect all the movements of all instruments.

 In the alternate scenario the pair will fall towards the support trendline of the upwards channel (the dark blue line) and might break below it. In my opinion, however, this scenario is less likely.


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