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Mr. Aussie ahead of RBA Rate Decision


Jun.30.2014

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The pick of the day is Mr. Aussie as he dances sideways against Ms. USA on the forex dance floor right before the RBA Rate decisions tomorrow. In the Reserve Bank of Australia’s previous monetary policy statement, Governor Stevens and his men decided to keep interest rates on hold at 2.50% and announced that they plan to maintain a period of stability in rates. Stevens also highlighted improvements in housing and hiring, but also mentioned that the government’s budget cuts could weigh on overall growth. When it comes to Mr. Aussie’s value, he reiterated that the currency “remains high by historical standards” and that this might do more damage on commodity prices.

What to expect this time?

Since the RBA policymakers already laid out their plans to keep interest rates on hold for much longer, no rate changes are expected in their upcoming policy announcement. But still we could see some sentiment change in the pair’s dance moves while Governor Stevens makes his statement, as this might contain more clues on what the RBA’s next moves might be.

Here are the two fundamental scenarios:

1-      Stronger emphasis on threats to economic performance, such as falling commodity prices or government spending cuts, could push Mr. Aussie down

2-      Upbeat remarks concerning the recent pickup in China’s manufacturing industry could push Mr. Aussie up.

On the technical side, Mr. Aussie has already broken above a falling wedge and above the 61% Fibo levels after an uptrend, dancing above the Ichimoku cloud. MACD indicator remains on the upside as well but the pair has been dancing sideways on the daily dance floor for the past couple of weeks.

AUDUSD technical analysis daily forex chart Ichimoku Fibonacci MACD falling wedge

Tomorrow’s rate decision could give us a more clear view on whether or not the pair is ready to make more up-moves. We are looking for moves towards 0.9500 and 0.9760. Now if the pair decides to o nuts and break below 0.92, we could see some down moves towards 0.9081 and 0.89 in extension.

 

Intraday we could expect long positions above 0.939 with targets at 0.943 & 0.9445 in extension.

More on Fundamentals

Looking to this week, it is likely that we'll start to see the summer lull start to kick in. Over the last two summers we had the relative 'excitement of Mario Draghi saying he will do whatever it takes and Ben Bernanke giving the markets very mixed signals about QE. Now with central bankers having said their piece and people 'knowing' where they stand with monetary policy for the time being, a lot of people will be looking/hoping for a quiet life over the next couple of months.

We're also aware that the above could be 'famous last words' and that there is still some key data out this week that those still at their desks will be looking at. Most notable will be Thursday's US employment report, as well as UK and European PMI numbers that will be posted earlier in the week. However, given the ranges that the FX market traded in last week, we're going to have to see some real surprises in the data to force a reaction.

Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. To get the most recent intraday updates, don’t forget to follow Invest Diva on Twitter and Facebook.

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Intraday Forex Technical Levels

 

EUR/USD Intraday: the upside prevails.

Invest Diva likes: Long positions above 1.3635 with targets @ 1.367 & 1.369 in extension.

If pairs go nuts: Below 1.3635 look for further downside with 1.362 & 1.36 as targets.

What’s up on the forex dance floor: The pair is supported by a rising trend line and is breaking above its previous top.

Supports and resistances:
1.372
1.369
1.367
1.3656 Last
1.3635
1.362
1.36

スライド1

GBP/USD Intraday: the bias remains bullish.

Invest Diva likes: Long positions above 1.7 with targets @ 1.706 & 1.708 in extension.

If pairs go nuts: Below 1.7 look for further downside with 1.697 & 1.695 as targets.

What’s up on the forex dance floor: The pair is rebounding above its support as the RSI is well directed.

Supports and resistances:
1.71
1.708
1.706
1.7049 Last
1.7
1.697
1.695

USD/JPY Intraday: the downside prevails.

Invest Diva likes: Short positions below 101.6 with targets @ 101.15 & 101 in extension.

If pairs go nuts: Above 101.6 look for further upside with 101.8 & 102 as targets.

What’s up on the forex dance floor: The pair remains within a bearish channel.

Supports and resistances:
102
101.8
101.6
101.3445 Last
101.15
101
100.85

スライド3

USD/CHF Intraday: the downside prevails.

Invest Diva likes: Short positions below 0.8925 with targets @ 0.888 & 0.886 in extension.

If pairs go nuts: Above 0.8925 look for further upside with 0.894 & 0.8955 as targets.

What’s up on the forex dance floor: The pair remains under pressure and is breaking below its support.

Supports and resistances:
0.8955
0.894
0.8925
0.8898 Last
0.888
0.886
0.884

NZD/USD Intraday: consolidation.

Invest Diva likes: Short positions below 0.879 with targets @ 0.87 & 0.868 in extension.

If pairs go nuts: Above 0.879 look for further upside with 0.8835 & 0.886 as targets.

What’s up on the forex dance floor: Technically the RSI is below its neutrality area at 50.

Supports and resistances:
0.886
0.8835
0.879
0.874 Last
0.87
0.868
0.8655

USD/CAD Intraday: the downside prevails.

Invest Diva likes: Short positions below 1.07 with targets @ 1.064 & 1.0615 in extension.

If pairs go nuts: Above 1.07 look for further upside with 1.0725 & 1.0755 as targets.

What’s up on the forex dance floor: The RSI has struck against a major resistance around 70% and is reversing down.

Supports and resistances:
1.0755
1.0725
1.07
1.0677 Last
1.064
1.0615
1.058

Intraday US Index

S&P500 (CME)

Short positions below 1960 with targets @ 1936 & 1918 in extension.

Alternative scenario: Above 1960 look for further upside with 1967 & 1975 as targets.

Dow Jones (CBT)

Short positions below 16910 with targets @ 16550 & 16430 in extension.

Alternative scenario: Above 16910 look for further upside with 17000 & 17090 as targets.

Nasdaq 100 (CME)

Short positions below 3849 with targets @ 3808 & 3793 in extension.

Alternative scenario: Above 3849 look for further upside with 3865 & 3890 as targets.

Russell 2000 (ICE)

Short positions below 1190 with targets @ 1147 & 1133 in extension.

Alternative scenario: Above 1190 look for further upside with 1210 & 1225 as targets.

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