Good morning. Today, the AUD is may be on focus in the FOREX market. The RBA is expected to increase interest rates, which could have an important influence on the currency market. Anyway, we wish you a nice day and successful start into the new month.
Market review
The AUD was near the highest level this year against the USD on speculation the nation’s central bank, RBA will increase interest rates at its meeting today. The benchmark rate would rise from its “emergency” setting at a half-century low of three percent, RBA Governor Glenn Stevens said on August 14th. An increase of the interest rates would spur demand for the nation’s assets. Benchmark interest rates are 0.1 percent in Japan and as low as zero in the U.S., compare to the current rate of 3 percent in Australia. Today, the AUD fell a bit against the USD, but it reached a high of 0.8471 on Friday and 0.8459 yesterday. The last time that the AUD was over this level was at the 29th of September 2008.
The JPY gained against a basket of currencies after speculation that asset prices are overblown, which boosts demand for the relative safety of the Japanese currency. The AUD/JPY fell for a second day to 78.28 after touching a low at 77.54 at the beginning of the week. The USD/JPY fell also for a second time this week after it reached a low at 92.55, which was its lowest price since July 13th.
USD/JPY
Since the beginning of the last month, the USD has lost inside a bearish trend channel against the JPY. After it tried to break the upper line of the channel several times during august, it fell further and seems to be on the way to reach the support level at 92.00. If the market doesn’t break the trend channel, it may lose towards its lowest level since July around 92.00.
CAD/JPY
As you can see, the CAD has also lost against the JPY. It started the bearish phase at the beginning of August along a downward “Andrews’ Pitchfork” channel. Currently, the market trades inside the upper channel and it seems to have enough power to cross the 85.00 resistance line. This might be a sign for a pull-back towards the upper line of Andrews’ Pitchfork channel.
