AUD/USD technical analysis: Adds 20 pips after RBA, but range breakout remains elusive

AUD/USD is better bid at press time, possibly due to the risk-on action in the markets.
The outlook remains neutral as the pair is still trapped in a narrow trading range of 0.6735 to 0.6822.

Omkar Godbole FXStreet Contributor

AUD/USD, which traded around 0.6760 before the release of the Reserve Bank of Australia's August meeting minutes, jumped to 0.6783 a few minutes before press time.

The RBA minutes confirmed the easing bias and offered no hawkish or dovish surprises. Even so, the AUD picked up a bid, possibly due to optimism about a US-China trade deal and the resulting rise in riskier assets.

For instance, the S&P 500 index, a global benchmark for equities, rose 1.21% on Monday, as the Trump Administration extended the reprieve on penalties for doing business the Chinese telecommunications equipment company Huawei.

Awaiting range breakout

The pair has risen by 20 odd pips in the last hour or two. However, the outlook remains neutral, as the pair is still trapped in a narrow range of 0.6735 to 0.6822. The pair has been restricted to that trading range since Aug. 8.

An upside break would validate the long-tailed Doji candle created on Aug. 7 and open the doors for a stronger corrective bounce to the 50-day moving average, currently at 0.6943.

A downside break of the trading range would expose the low of 0.6677 set on Aug. 7. As of writing, the pair is trading at 0.6776.

Daily chart

Trend: Neutral

Pivot points

1. R3 0.681
2. R2 0.6799
3. R1 0.6781
PP 0.6771
1. S1 0.6753
2. S2 0.6743
3. S3 0.6725

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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