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FxWirePro: AUD/USD bounces off from three-week low, extends gains to test 5-DMA after Aussie ignores RBA minutes

AUD/USD chart - Trading View 

Spot Analysis:

AUD/USD was trading 0.39% higher on the day at 0.7277 at around 09:00 GMT

Previous Week's High/ Low: 0.7375/ 0.7262

Previous Session's High/ Low: 0.7268/ 0.7220

Fundamental Overview:

Earlier on Tuesday, minutes from the Reserve Bank of Australia (RBA) meeting showed the central bank's concern that the spread of the Delta variant could slow the economy's recovery once coronavirus lockdowns start to ease.

That said, the RBA still expects strong growth to resume next year. Australian 10-year bond futures were 0.328 points lower at 97.293, equivalent to a yield of 1.285%. 

The US dollar edged lower in early European trade Tuesday, ahead of the start of this week’s crucial Federal Reserve meeting.

The Fed is likely to provide an outlook on how soon and how often they think the economy will need interest rate rises over the next three years.

Technical Analysis:

- AUD/USD has bounced off with 'Hammer' formation on Monday's trade

- The pair finds major support at 200-week MA, further weakness only on break below

- GMMA indicator shows bullish shift in minor trend on the intraday charts

- Price is testing 5-DMA resistance at 0.7281, break above will see more gains

Major Support and Resistance Levels:

Support - 0.7214 (200-week MA), Resistance - 0.7281 (5-DMA)

Summary: AUD/USD major trend remains bearish. Strong recovery looks elusive amid China property developer Evergrande's solvency issues and looming FOMC policy meeting. 

Technical analysis still points to a bearish bias. Decisive break above cloud required for upside continuation. On the flipside, breach at 200-week MA support will drive more weakness. 

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