AUDUSD: The dailies appear to be turning a little more positive

Preferred Strategy: The Aud has had a tight session (0.7650/93), leaving the technical outlook unchanged but with the Statement on Monetary Policy coming up we could get a directional move.

While the short term momentum indicators are neutral, the dailies appear to be turning a little more positive, suggesting that we could be in for a possible squeeze towards 0.7700, above which could see a run towards 0.7730/40.

The weekly charts still look heavy though so selling into strength remains the overall plan. Near term support arrives at 0.7650 and again at the strong level of 0.7625. An eventual break of 0.7625 would bring fresh selling which could then see a run towards 0.7600 and eventually to 0.7570. Overall, with the longer term charts looking heavy, I suspect the Aud$ is building a bear flag (see daily chart) and is biding its time ahead of a more sustained test of 0.7625/30, which could then take us to 0.7570 and eventually towards 0.7400, but patience will be required and we look likely to see better levels to sell it than we are currently trading at.

Economic data highlights will include:

RBA Monetary Policy Statement, China New Loans