On Monday, the rebound from the Australian Dollar ends the New York session posting a bearish hammer, although not the strongest of positive signals.
Specifically, it indicates that bears (supply) entered the market, pushing the price down, but were later outnumbered by the bulls (demand), who drove the AUD/USD pair prices up.
Importantly, the upside price reversal must be confirmed, which means that the next candle must close above the hammer’s previous closing price at US$0.7280.
Earlier, the AUD/USD was unfazed by the release of the Reserve Bank of Australia (RBA) monetary policy meeting minutes.
As per the latest RBA Minutes, “Members recognised that the outbreak of the delta variant was delaying the recovery and had added to the uncertainty about the future.”
The statement added that the economy was expected to bounce back as vaccination rates increase and restrictions are eased.
Besides the mixed price action, China was absent in observance of the Mid-Autumn Festival.
Viewing the technical aspect, the bearish bias has buckled somewhat whilst viewing the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator, while Moving Average Convergence Divergence (MACD) holds a negative signal.
The Average Directional Movement Index (ADX) trend indicator holds to a weak bearish trend.
From the rebound, a New York close above US$0.7280 could give additional bullish momentum and drive prices towards US$0.7340.
Reassess from there, with the short-term viewed from US$0.7225-30.