AUD/USD continuing to chop in thin markets ahead of Reserve Bank of Australia rate decision

• The Aussie is sideways on thin markets for Australian Labor Day.
• Bearish pressure mounting on the AUD as RBA is expected to hold rates.

AUD/USD is still trading sideways on thin volumes ahead of the European markets, managing to find a bounce in the declines, currently treading water near 0.7750.

With the Australian markets dark as they celebrate Labor Day, little is moving the AUD. Tomorrow will pose a different scenario though when the Reserve Bank of Australia (RBA) drops their Interest Rate Decision at 03:30 GMT. Although expectations are largely priced in for the RBA to hold rates where they are, the run-up to GDP figures early Wednesday at 00:30 could give markets something to trade.

The pair is mainly being driven by broader market sentiment, with the US Dollar bouncing amid inflation fears and rising bond yields; though the Dollar action has cooled somewhat recently, Friday will see the release of the Non-Farm Payrolls monthly data, which promises to cap the week off with volatility.

AUD/USD Technicals

The pair continues to congest just beneath the 200-day SMA, and bearish pressure continues to mount as the pair corrects from consistently lower highs. The pair has been making consistently higher lows since early 2016, but that trend may be coming to an end as analysts expect the AUD to soften over 2018 and 2019. Intraday levels are found at a support zone from 0.7695 to 0.7630, while resistance is priced in at swing lows near 0.7780 and 0.7810.