Whilst the anticipated rally has paused below A$1605 the bias is for a limited retracement or sideways trading before the rally continues
Following RBA’s decision to keep rates on hold yesterday I had expected AUDUSD to break comfortably above 77c during the London or US session. Instead it reversed lower as the Greenback recouped NFP losses, driving the Aussie down back below 77c, closing the day with a Shooting Star formation near the multi-year lows.
Its’ failure to pick itself up convincingly from these lows suggests we may see a limited pullback on Gold/AUD before the bullish trend resumes.
If there is a reason to err on the side of caution it is the Bearish Outside day yesterday and the fact we have FOMC minutes out later. If, for example, FOMC minutes are Dovish we would expect both Gold and AUD to strengthen, making price action relatively subdued (compared to XAUUAD or AUDUSD). Hawkish minutes would presumably have the inverted effect on both AUD and Gold, resulting in a potential stalemate.
So we may find the most probably outcome is a sideways correction to hold above $1573 before the bullish trend resumes.
A break below $1573 could see price revisit $1554 support, which is also around the short-term MA’s. At which point I would seek bullish divergences on lower timeframes and bullish setups, to assume a deeper correction
Either way, my bias if for Gold/AUD to reach $1650 over the coming weeks.