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Forex: AUD/USD takes control of 1.0180 ahead of RBA

AUD/USD ends Monday having recorded a meritorious rejection off 7-month lows, a potential reversal pattern indicating a stronger presence of buyers aiming to reclaim higher ground. But even with the improved technical picture, price activity along Asia will be subject to the RBA monetary policy decision at 3.30GMT, where a rate hold is expected.

The pair closed NY above the previous breakout point at 1.0180 - courtesy of DJIA/SP500 HFT-led rises -, which may be seen as an odd enhancer to further support the re-establishment of longs seeking a potential retest of former double floor at 1.0225.

According to FXBrief editor Peter Fell, "shorts are likely to get squeeze further in early Sydney trade, with sources indicate further buy stops above yesterdays high of 1.0205." He continues by noting that 1.0203 is the 50% fibo on the 1.0290/1.0116 move, making him suspicious that "overall, there is a potential stretch towards the 61.8 fibbo at 1.0224 ahead of the RBA."

Valeria Bednarik, chief analyst at FXstreet.com, also shares her view on the Aussie, saying: "The hourly chart shows indicators losing momentum near overbought levels, anticipating a probable reversal: 1.0220 area will be key, as if above, the bullish momentum will likely extend, looking then for 1.0270." In case of a topside failure at 1.0220, Valeria sees "the pair resuming the downside." Overall, just like Peter, she also thinks that "chances remain to the upside as per stocks strong upward tone."

Forex: EUR/JPY capped below 122.00

With Eurogroup meetings still going on in Brussels and a bailout for Cyprus likely to happen before month ends, Reuters reported, EUR/JPY is last at 121.78, around daily and weekly highs, recovering previous weekly close price, off daily lows at 121.14. The cross is quiet now as EUR/USD and USD/JPY are both near session highs, flat for the week so far, with almost no upside yet seen.
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