Review and dynamics
After reaching two-week highs at the level of 0.7615 earlier on Monday, the pair AUD/USD begun to decline at the European session in anticipation of tomorrow's RBA meeting. It is expected that rate in Australia will be reduced by 0.25% and the Bank will show inclinations to more monetary policy easing in the country. If it happens, the Australian currency will fall in the medium term.
A new descending channel with a lower limit at the level of 0.6975 has been formed on the weekly chart.
If the RBA lowers interest rate tomorrow and demonstrates adherence to soft monetary policy, the Australian dollar will fall in the market.
Strong support levels of 0.7500 (ЕМА200 on 4-hour chart) and 0.7445 (Fibonacci 23.6% to the wave of decline since July 2014, ЕМА144, ЕМА200 on the daily chart) prevent further decline in the pair AUD/USD.
The difference in the monetary policies of the US Fed and the RBA and the decline in the oil prices put pressure on the AUD.
The fall in the pair below support level of 0.7445 will trigger the decline to support level of 0.7360 (lower line of the ascending channel on the daily chart) or further down below 0.7140 (lows of May) and 0.6975 (lower line of the descending channel on the weekly chart).
An alternative scenario suggests that the upward correction will continue with the nearest targets of 0.7670, 0.7720 and 0.7820 (Fibonacci 38.2%).
The indicators OsMA and Stochastic do not give clear signals. The indicators on the weekly and 4-hour charts give signals for opening short positions, while on the daily chart they give signals for long positions.
Support levels: 0.7500, 0.7470, 0.7445, 0.7360, 0.7290, 0.7200 and 0.7140.
Resistance levels: 0.7615, 0.7670, 0.7720, 0.780 and 0.7820.
Sell on the market. Stop-Loss: 0.7620. Take-Profit: 0.7500, 0.7470, 0.7445, 0.7360, 0.7290, 0.7200 and 0.7140.
Buy Stop: 0.7620. Stop-Loss: 0.7570. Take-Profit: 0.7670, 0.7720 and 0.7820.
New descending channel
Support level of 0.7445