It’s a relatively busy day on the economic calendar, with the EUR and Loonie in focus. First up, however, is the RBA monetary policy decision later this morning.
The Australian dollar initially tried to rally during the trading session on Monday but gave back the early gains to sit on top of the 50 day EMA.
The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .7733.
AUD/USD is testing the resistance level at 0.7760.
By Gina Lee
The RBA is taking the lead in acting as a breakwater for rising yields, a role typically played by the Bank of Japan.
Investors are wagering the RBA might have to hike rates as early as next year, even when policy makers have said no move was likely until 2024.
The Australian dollar shot straight up in the air during the week to test the 0.80 level. This is an area that attracted a lot of attention and profit-taking.
The Australian dollar has pulled back again on Friday to reach down towards the 50 day EMA. We have seen a lot of pullback from a major resistance barrier.
The direction on Friday is likely to be determined by trader reaction to the 50% level at .7786 and the 61.8% level at .7733.