AUD/USD bounces Tuesday on RBA chatter

The AUD/USD finally showed some signs of life Tuesday after comments from the RBA’s Phillip Lowe – despite being somewhat dovish on the surface – failed to further tank the oversold cross.

AUD/USD traders hoping this is more than just an intraday bounce

Those brave souls that are long of the AUD/USD right now are hoping among hope that the bounce that occurred early Tuesday following the RBA’s Phillip Lowe’s speech will amount to something more than just another opportunity to sell. That may be a very difficult dream to realize, though, given the very bearish technical condition the AUD/USD finds itself in right now.

AUD/USD traders have no more data to which they can react until the US session commences later on Tuesday. At that point, though, they will get to react to S&P Case Schiller Home Prices; US Building Permits; US Housing Starts; US Consumer Confidence and the US Richmond Fed Manufacturing Index.

Technical outlook for AUD/USD

Technicians note that the AUD/USD has broken below very important technical “correction support” at 0.9190. That level represented the 100% Fibonacci price projection for what could have been an “abc” correction to the downside. Now that “correction support” has been broken, much more downside potential has been opened up in the short-term. The next projected support comes in at the Fibonacci-generated 0.906225 and 0.8983. The ultimate target, though, may be all the way down at the August low of 0.8847. Resistance for the cross starts at the very short-term “correction resistance” at 0.9195 and is backed up by the 11/12 close at 0.9301.

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