Can we expect the current resistance area we currently find ourselves in to be broken, or will a leg lower to the bottom of the range now transpire?

The British pound to Australian dollar exchange rate (GBP/AUD) trading 0.16 pct lower on a day-to-day basis at 1.8107.The euro to Aus dollar rate (EUR/AUD) is 0.06 pct higher at 1.4536. The Australian to US dollar (AUD/USD) is 0.01 pct lower at at 0.9367.Please be aware that the above mid-market quotes are subject to a discretionary spread levied by your bank. An independent FX provider will however seek to undercut your bank's offer and in some instances can deliver up to 5% more currency on execution. To learn more, please read here.

Forecasting the Australian dollar to move lower

As mentioned, there appears to be a rangebound pattern shaping up in the AUD/USD - this has been in place since April.

Bank of America Merrill Lynch Global Research reckon we are not about to see a move above this:

"With the RBA firmly on hold, we expect AUD to remain range bound until domestic resource investment begins to slow in earnest from 2015 onward.

"There are downside risks to our view from China as our forecast assumes stable growth of 7.6% in 2014 – a sharp slowdown in Chinese credit growth and investment would imply a weaker AUD."

AUD/USD upside potential seems limited

According to a just-released forex forecast note from Swissquote Research a break higher remains unlikely at this stage:

"Prices are moving in a horizontal range between the support at 0.9206 and

the resistance at 0.9461.

"The dovish stance of the RBA and the elevated levels of price oscillators suggest a limited upside potential for the Aussie.

"We would therefore favour a short AUD/USD position on signs that prices

are fading near 0.9461.

"The initial downside risk would be given by a new test of the support at 0.9206. Should this support break, further decline towards 0.8966 (61.8% retracement of the previous rise) would then be expected."

Reserve Bank of Australia (RBA) provides little support

In this current environment within which currency rates are dictated to by central bank policy we keep an eye on the RBA.

The release of the minutes of the June policy meeting of the Reserve Bank of Australia (RBA) surprised the market by its dovish tone.

Despite a current smoother-than-expected handover from the mining sector to the rest of the economy, the RBA remains pessimistic about the growth outlook over the rest of this year and into the next.

"As the rebalancing of the Australian economy favours a choppy recovery, we believe that there are significant risks to see more concerns being voiced by the RBA during its next meetings," say Swissquote.

Furthermore:

"The question raised in the minutes by the RBA about the negative effects on demand from the expected decline in mining investment and the planned fiscal consolidation points for an easing bias.

"As a result, this new stance is likely to push back market expectations for the first rate hike, supporting a lower Australian dollar."