Aussie dollar finds support ahead of RBA minutes

OzForex Research OzForex Foreign Exchange

AUD - Australian Dollar

The Australian dollar dipped slightly on Monday trading at a 24-hour low of 0.6761. The Aussie found some support this week as the prospect of stimulus in China and Europe soothed risk sentiment, though the Sino-US trade dispute remains a worry.

Looking ahead today and we will see the release of the minutes from the Reserve Bank of Australia's August policy meeting from a fortnight ago. The minutes should reiterate that rates could be cut again if needed to lower unemployment and get inflation moving. Future markets imply around a 76 per cent chance of another quarter-point cut to 0.75 percent in October, though the odds did widen a little last week when the jobs data proved surprisingly robust.

From a technical perspective, the AUD/USD pair is currently trading at 0.6766. We continue to expect support to hold on moves approaching 0.6740 while now any upward push will likely meet resistance around 0.6800.

Key Movers

This week has begun with a positive vibe, with some US companies allowed to do business with Huawei for a further 90 days. The US macroeconomic calendar had nothing to offer on Monday. However US President Donald Trump reiterated that the Federal Reserve needs to cut rates by 100 basis points, for the economy to do “even better.” The Greenback advanced in the afternoon as Federal Reserve Bank of Boston President Eric Rosengren said that he does not see a lot of need to take action on monetary policy. Rosengren, a voter this year on the Federal Open Market Committee, was one of two officials who dissented when the panel cut rates on July 31. Minutes of last month’s meeting will be released at 2 p.m. in Washington on Wednesday.

The Pound Sterling edged lower on Monday, although sentiment towards the pound was better than in recent sessions as investors hoped Britain and the European Union could make some progress in Brexit talks. From a technical perspective, the GBP/USD pair ended Monday marginally lower in the 1.2130 price zone a couple of pips below Friday’s high. The GBP/USD pair is currently trading at 1.2126. We continue to expect support to hold on moves approaching 1.2100 while now any upward push will likely meet resistance around 1.2170.

Expected Ranges

AUD/USD: 0.6700 - 0.6800 ▼

GBP/AUD: 1.7800 - 1.8000 ▲

AUD/NZD: 1.0450 - 1.0650 ▼

AUD/EUR: 0.6000 - 0.6200 ▼

AUD/CAD: 0.8900 - 0.9100 ▲

Author

OzForex Research

OzForex Foreign Exchange

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