The overnight aussie news has seen the Friday risk rally all but wiped out. The moves must be frustrating both bulls and bears alike.
Support is seen at the current lows of 1.0240/45 with further support below at 1.0230 and the short term double bottom at 1.0220.
With further economic data out tonight we could well have some movement ahead of the decision. As with such large risk events be aware of some position adjustments and squaring ahead of the release.
As for trading the RBA, the consensus is about 50/50 for a cut. The signs of a further slow down were in the news overnight and Chinese growth worries are back on the burner so it could lead to increased pressure for a cut. If they don’t cut then I think we get a pop up in the pair which may present a good shorting opportunity as I believe the fundamentals will overtake the rate decision.
I’ll be looking to sell the pair again up towards 1.0400 but we also need to see whether the EU negative rates talk sees more money coming out of the euro looking for better yields. It will pay to keep one eye on EUR/AUD in the coming days.
