The RBA will grapple with unexpectedly high inflation numbers when the central bank meets on Tuesday. In the meantime, the market is grappling with AUD/USD.
Australia’s economy is in a lull, technical support is minimal and the US dollar is backed by tapering and better growth.
The pair touched a three-day low in Asia at 0.8709 but bids ahead of the big figure sparked a rebound. Last at 0.8787. More bids are at the Jan 24 low (and cycle low) of 0.8660.
To the upside, the high today was 0.8801 with offers at yesterday’s high of 0.8829 and 0.8850.
The downside momentum is strong and the trade isn’t overcrowded but the market needs a catalyst for fresh selling so we’ll probably have to wait for the RBA. More on the RBA decision.
