AUDUSD bears attack 0.7400 key support despite RBA tapering

Early Tuesday, the Reserve Bank of Australia (RBA) surprises markets by announcing details of weekly bond purchase tapering. The traders were earlier hoping for a delay in the tapering plans and hence the AUDUSD jumped around 30 pips just after the RBA news. However, downbeat comments concerning the Aussie GDP and cautious economic view recall the pair sellers, directing them towards 61.8% Fibonacci retracement of July–August downside, near 0.7410. Also acting the crucial support is an upward sloping trend line from August 20, near the 0.7400 round figure. Given the RSI pullback from overbought territory, AUDUSD may witness further declines and hence the stated support line gains major attention.

Alternatively, a descending resistance line from July 13, near 0.7480, guards the quote’s short-term upside. In a case where the AUDUSD bulls look to retake controls beyond 0.7480, they need validation from the 0.7500 threshold, a break of which will propel the run-up towards July month’s high near 0.7600. Overall, RBA’s cautious optimism needs back-up from the weaker US dollar and improvement in the covid conditions to keep the AUDUSD buyers hopeful.