In accordance with the top of the RBA, Philip Lowe, there are nonetheless “no severe arguments in favor of tightening financial coverage within the brief time period.” In his opinion, “earlier than the rise in rates of interest will take a while.” In a latest Home Standing Committee listening to, Lowe mentioned it was possible that if the financial system adopted the financial institution’s forecasts, a charge hike could be on the agenda as early as the top of this 12 months. Nonetheless, this doesn’t imply that it will likely be upgraded quickly after. Whereas the Australian financial system is dealing with the coronavirus pandemic, there’s presently no proof of over-stimulation, in response to Philip Lowe.
Thus, not like the Fed, the RBA will in the interim preserve a delicate course of its financial coverage, which signifies that the primary driver of the AUD/USD dynamics is the strengthening of the US greenback.
Right now’s decline in costs for oil and different commodities in opposition to the backdrop of falling international inventory indices can be placing stress on commodity currencies, one of many essential of which is the Australian greenback. And as we are able to see, AUD/USD is actively declining immediately, reaching an intraday low close to 0.7085. A breakdown of this native assist stage will result in additional decline with the closest goal on the decrease border of the descending channel on the weekly chart, passing by means of the extent of 0.6970. AUD/USD stays within the zone of the worldwide bearish development. Due to this fact, brief positions ought to be most popular.
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