Australian dollar
The RBA released their minutes this week and you can read the release here. The minutes were largely explaining their on hold for now perspective, but there was an acknowledgement within the minutes that a weaker AUD may be ahead. Global protectionism, growth and a hiking Fed both seen as key drivers in this respect.
So, last night Australia's PM Malcolm Turnbull was replaced by the Treasurer Scott Morrison. Aud did pop, but the pop has been muted and contained by near term resistance at key moving averages. Eamonn, as ever helpfully, pointed out that elections would soon be on the table, likely brought forward from it's May 2019 schedule now.
In short, brief relief for the AUD, but the same situation remains. USD is strengthening, Copper and Iron ore are falling, US-China trade war is growing hitting production and now a slow down in global growth seems inevitable as things escalate and continue. So, this AUD pop looks good for fading. Australia's four largest states: New South Wales, Victoria, Queensland and Western Australia are all decelerating according to ANZ's report. These four states constitute 90% of Asutralia's GDP, so a slow down seems ahead. See Eamonn's report here on that.
Looking at some of the AUD charts price has moved up to some obvious places to have a short. For even longer positional plays the next leg down can be targeted in some pairs, taking the CD leg of the AB move down.
Here are some charts...
AUD/CAD rejected off the 100MA on the 1 hr (blue line)
AUD/NZD rejecting the 200MA on the 4hr (Red line). (Not a great pair for a trade, just for reference since NZD is pretty weak too)
AUD/USD. Price up against the 200MA. Check out Justin's post for a breakdown on the AUD/USD and some key levels in play.
Risks to shorting the AUD are the Jackson Hole Symposium and the impact that has on the USD pair. There is also Nafta considerations for the AUD/CAD pair as well as oil (which is rising away from the 200MA at the time of typing). Also Bank of Canada's Poloz is speaking at the Jackson Hole Symposium tomorrow which is his final chance to give a heads up for any early BOC rate hike next month or otherwise.
Have a good weekend, one and all
