The Australian dollar bulls took the challenge to an intraday high of US$0.7406 at the beginning of Monday before encountering a heavy bearish defence which triggered the decline to an intraday low of US$0.7344 and also, posting a bearish outside range day.

Although this typical pattern is considered bearish, we would still have to wait for a decisive break/close sub-US$0.7340 for the bearish call.

If witnessed, then this would set up the bearish trade to US$0.7225-65. Reassess from there.

Earlier, as widely expected, the Reserve Bank of Australia (RBA) kept its official cash rate unchanged at 0.10% on Tuesday.

“In Australia, the economic recovery is underway, and recent data has generally been better than expected,” RBA governor Philip Lowe said in a statement.

Items of interest this week include Wednesday’s AUD gross domestic product (GDP) figures for the September quarter which are expected to improve from the 7% slide from the previous month, which is followed by RBA Governor will testify before the House of Representatives Standing Committee on Economics, in Canberra.

In the U.S. we get an update of the Non-Farm Employment Change and Unemployment Rate, and U.S. Federal Reserve Chairman Jerome Powell is due to testify on the CARES Act before the House Financial Services Committee, in Washington DC.