Many are counting on the RBA to give more tightening clues in their upcoming statement, but what if they disappoint?
Here’s a bearish AUD setup I’m watching.
AUD/USD: 4-Hour
Unless my eyes are deceiving me, a complex head and shoulders pattern seems to have formed on the long-term chart of this pair.
Price has been hopping around the neckline area around the .7000 major psychological handle for quite some time, and the RBA decision might spur a more definitive move.
You see, Aussie bulls are hoping to get stronger rate hike guidance from the Australian central bank this time, given how employment and inflation have been picking up. In fact, some are even counting on hints of a tightening for August!
However, RBA head Lowe has been maintaining a cautious tone in his recent speeches, suggesting that they’re not looking to tighten at all this year. If the central bank keeps playing this vibe in their upcoming statement, we might just see a downside break and reversal for AUD/USD.
The chart pattern is roughly a thousand pips tall, so the selloff could last by the same height. Technical indicators also support a bearish move, with the 100 SMA safely below the 200 SMA and Stochastic heading lower.
