AUDUSD: The consolidation below 0.7700 continues
Preferred Strategy: The Aud has had a steady session as the consolidation below 0.7700 continues although it is finishing the US session at close to its highs ahead of today’s RBA meeting.
No rate change is forecast but the statement may start tilting to the dovish side given that the domestic retail sales and inflation data continue to disappoint and there is some speculation of talk of a rate cut down the track. I don’t really see it but while we are below the neckline of the head/shoulder formation and the 200 DMA, we could be in for further downside pressure where support will once again arrive at 0.7640/50 and again at 0.7625. A break of this would bring fresh selling which could then see a run towards 0.7600 and eventually to 0.7570.
On the topside, resistance will be seen at 0.7700 ahead of 0.7720 and then 0.7740. Given the generally heavy look of the charts I still prefer to sell into strength. Being Melbourne Cup day, interest will be limited.
Economic data highlights will include:
AIG Performance of Construction Index, RBA Interest Rate Decision, Statement, China Foreign Exchange Reserves
Author
Jim Langlands
FX Charts
Jim Langlands began his trading career in the commodities markets in London in 1976, before moving to Australia in 1979 to work as a floor trader on the Sydney Futures Exchange.
