To say that AUDUSD has lacked any clear sense of direction lately would be an understatement. The pair has been trading in a 380 pip range since late January after dropping 1,200 pips during the last four months of 2014.
It looked as though the pair would finally break the range top last week as the bulls pushed the market higher during the first 48 hours of trading. However the second half of the week belonged to the bears as they quickly erased 230 of the 260 pips that had been gained earlier in the week.
The future for AUDUSD hangs in the balance with the RBA rate statement scheduled for Tuesday at 12:30am EST. Any material change will likely have a drastic and lasting impact on the pair’s future direction.
As important as the rate statement is, it’s important to keep in mind that it isn’t the only event risk on tap this week for the Australian dollar. There are several other events on the docket that could sway the market one way or the other. That said, any events prior to the statement will likely fall short in terms of producing any significant volatility.
Summary: On the sidelines for now given the upcoming event risk on Tuesday. Last week’s bearish pin bar keeps my bearish bias intact for now. As such, any bearish price action at the key levels outlined below could present a favorable setup during the second half of the trading week.