AUDUSD has been trending higher, thanks to the pickup in risk appetite. Price stalled upon hitting resistance near .7600 and is showing signs of a pullback, possibly to the rising trend line visible on the 4-hour chart.

Using the Fib tool on the latest swing high and low shows that the 61.8% Fibonacci retracement level is closest to the trend line around the .7300 support zone. This is also near the 100 SMA, which usually holds as a dynamic inflection point.

The 100 SMA is above the 200 SMA so the path of least resistance is to the upside and the uptrend could resume at some point. However, both RSI and stochastic are pointing down so there's room for a correction. Once these oscillators indicate oversold conditions, Aussie bulls could regain control.

Earlier today, the RBA released the minutes of their latest monetary policy meeting, which contained no surprises from their actual statement. Policymakers expressed confidence in the Australian economy while pointing out persistent risks, acknowledging that the current policy is appropriate.

The main event risk for today might be the US retail sales report, which is expected to show a 0.1% drop for the headline figure and a 0.2% dip for the core figure. Later in the week, the FOMC will announce its policy decision and spur more volatility for dollar pairs.

Editor’s Note: Equity investors/traders can use the Currency Shares Australian Dollar Trust (FXA, quote) ETF to take positions in the Aussie dollar without a FOREX account.  The ETF looks to track the price of the Aussie dollar (AUDUSD), minus ETF fee. The fund seeks to reflect the price of the Aussie dollar (AUDUSD) with the shares representing a cost-effective investment relative to investing in the FOREX market.

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