Australian dollar took a small dive this morning following the release of the RBA meeting minutes. Prices reached a low of 0.9352 after the minutes revealed that further rate cuts are possible. However, further reading reveals that the threat of immediate rate cuts are not present, resulting in a strong rebound that sent prices by 30 pips at the time that followed.
This is actually not surprising, because it should be noted that this report is taken from the 5th meeting in November, where RBA ultimately decided not to bring lower rates. Therefore, it should already be a given that the minutes should not reflect openly pacifist tones. Since the minutes, RBA said that housing prices should rise further, reducing the possibilities down rates - as would be inflationary in nature, and certainly encourage more mortgage loans and therefore even higher prices. However, RBA stated its concern that the growth rates are moderate, which means they would have some form of easing measures in the future. This concept is even stronger when RBA reiterated that AUD is too high - it is clear that RBA want to do something, and now they are being prevented from reducing outright rate. It may be a long shot, but the possibility of unconventional easing methods (read: EQ). Rest, and help bring AUD lower, while helping growth - kill two birds with one stone
hourly chart
Perhaps this is due to the RBA outlook that has kept the AUD / USD rally verified. Again, it is also possible that traders are simply focused on the weak Australian economic fundamentals, resulting in an inherent bearishness that pushed AUD / USD back to around 0.937. From a purely technical perspective, prices have broken with the bottom of the Channel Rising, which weakens the upward pressure that has been in the game since November 14. The upward thrust resulting failed to rise in the channel, strengthening of bearish sentiment and opens a possible move towards 0.929.
stochastic reading is bullish if, with a bull cycle signal is at stake now, but it is unlikely that prices will be able to break much higher because we have the 0.939 resistance and the confluence with overhead low hanging channel. In addition, the curve Stoch will face "resistance" around 30.0 and 45.0 levels (based on historical intermediate trough), where it will not be surprising to see this bull cycle being cut short, with both price and curve Stoch less movement in the immediate future.
table Daily
long-term chart is bullish if we reference the rally since early September prices rebounded from the level of 0.93, with upside target as 0.952 and 0.940 as intermediate resistance. However, the long-term trend (see weekly chart) is actually bearish, and should current recovery capped below 0,952, the probability of a head and shoulders pattern increases which can potentially bring us all the way to under 0.0 levels in the coming months. Right now, however, the possibility of a fall from here is still possible that the stochastic curve is also facing its own "strength" of 35.0. If the curve Stoch 35.0 pauses coupled with a break of 0.94 prices, the probability of an upward thrust increases.
But traders should be aware that the long-term fundamentals continue to favor a stronger USD (due cone eventual QE) and a lower AUD (due RBA being forced to cut rates or by unconventional methods of easing). Therefore, even if the bullish momentum is building, traders should be alert a bearish pullbacks will be lurking and pounce when weakness in the bullish momentum is seen
Links :.
GBP / USD - Pound As little change remains above 1.61
USD / CAD - Loonie Edges Higher As Purchases of foreign securities jumps
USD / JPY - Dollar Eases but remains above 100
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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Read More : AUD/USD – Bearish Bias Remains Despite RBA Minutes Reflecting Non-Commitment To Cut Rates
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