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3 Mar 2015
RBA up next: AUD/USD scenarios - FXCharts
FXStreet (Bali) - Jim Langlands, Founder at FXCharts, shares his view on the possible scenarios to play out in AUD/USD today depending on the RBA monetary policy outcome, with market expectations calling for a back-to-back 25bp rate cut to 2%.
Key Quotes
"The market seems to have convinced itself that the RBA will cut today, with the only argument against doing so being the probable effect on the already inflated housing sector."
"If we do see a cut, then the Aud is likely to head swiftly below the session low of 0.7755 and the support at 0.7740, seen immediately after the release of the previous RBA Minutes. Below there, 0.7720/25 will be the next support ahead of 0.7700, a break of which would then head towards the channel support at 0.7680 and on to the 12 Feb low of 0.7643 and the trend low at 0.7625. Eventually I suspect we will reach the RBA’s stated target of 0.7500, and from a technical point of view we could head a lot lower, although that would be a long term move."
"On the topside, if there is no cut, then we will see a spike to back above 0.7800 and on towards minor resistance at 0.7830 and possibly to 0.7850. Above this could take the Aud up to 0.7880 and possibly even towards 0.7900 but if seen I would be a seller, with a SL placed above last week’s 0.7912 high."
Key Quotes
"The market seems to have convinced itself that the RBA will cut today, with the only argument against doing so being the probable effect on the already inflated housing sector."
"If we do see a cut, then the Aud is likely to head swiftly below the session low of 0.7755 and the support at 0.7740, seen immediately after the release of the previous RBA Minutes. Below there, 0.7720/25 will be the next support ahead of 0.7700, a break of which would then head towards the channel support at 0.7680 and on to the 12 Feb low of 0.7643 and the trend low at 0.7625. Eventually I suspect we will reach the RBA’s stated target of 0.7500, and from a technical point of view we could head a lot lower, although that would be a long term move."
"On the topside, if there is no cut, then we will see a spike to back above 0.7800 and on towards minor resistance at 0.7830 and possibly to 0.7850. Above this could take the Aud up to 0.7880 and possibly even towards 0.7900 but if seen I would be a seller, with a SL placed above last week’s 0.7912 high."