The Australian dollar retraced the decline from the June high (0.8858) and rallied to 0.8547 following the shift in market sentiment, while the Japanese Yen pared the overnight decline and rallied against the greenback as the U.S. dollar weakened across the board. The Australian dollar pared the decline from the June high (0.8858) and rallied to 0.8547 following the shift in market sentiment, but the intraday rally appears to be tapering off as price action continues to hold below the 10-Day SMA at 0.8555. The AUD/USD is 150+pips higher from the open after moving a whopping 180% of its daily ATR, and we may see a corrective retracement going into the Asian trade as the 30-minute RSI falls back from a high of 79. As a result, the aussie-dollar may retrace the overnight advance and fall back towards the 240-SMA at 0.8440 to test for intraday support, but a break to the downside may keep the exchange rate within the narrow range carried over from the previous week. However, as the Reserve Bank of Australia maintains a neutral outlook and deems current policy appropriate, the wait-and-see approach could weigh on the exchange rate in the second-half of the year as investors scale back expectations for further rate hikes.

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