| 24 Hour: Neutral -Prefer to sell rallies? | Medium Term: Neutral – Possibly look to buy dips. |
Preferred Strategy: Neutral wait for the CPI – possibly sell rallies.
The Aud squeezed up to 0.7969 on Tuesday but the gains faded once the US$ regained its footing and the Aud has finished pretty much in the middle of the day’s range. We now await the CPI (exp 0.4% mm, 2.2% yy) and a speech from the RBA Governor Lowe, who may take another opportunity to talk the Aud lower.
The momentum indicators look mixed again on Wednesday and a cautious stance is warranted although the longer term charts still hint that buying dips remains the medium term plan, with the weeklies particularly suggesting that at some stage we are in for a test of 0.8000+.
The short term momentum indicators look less positive and if we do head lower today, below 0.7900, the initial support will arrive at 21 July’s low of 0.7874, ahead of the chance of a drop to 0.7830 although this looks unlikely at this stage.
On the topside, the initial resistance will be seen at 0.7965/70, above which could see a move back to the 0.7988 trend high. Above here could then see a run towards 0.8000 and then to 0.8015 although I don’t think we are going there today unless the CPI easily beats expectations.
Economic data highlights will include:
W: CPI Q2
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