AUD/USD broke momentarily above 0.7800 during the European session and printed a fresh daily high at 0.7811, but then lost strength and pulled back below.
Currently the pair is hovering around 0.7790, slightly higher for the day, despite weak data from China and holding far from last week lows that lie at 0.7720.
AUD ahead of RBA
Tomorrow the Reserve Bank of Australia will announced its decision on interest rates. “The trendiness of global easing has driven traders to price-in over a 60% chance of a lower adjustment of the RBA cash rate. With a rash of G10 central banks shifting to a profoundly more dovish tone, traders have been quick to pile on to the lower RBA bandwagon. Yet the data does not support more stimulus”, warns Peter Rosenstreich, Head of Market Strategy at Swissquote.
According to Rosenstreich currently the positioning in the AUD is profoundly oversold, “suggesting even a rate cute and less then ultra-dovish, statement will should trigger significant short squeeze. Should the RBA buck the trend and wait for more factual evidence, the corresponding reversal in AUDUSD would target 0.8000.”
Currently the pair is hovering around 0.7790, slightly higher for the day, despite weak data from China and holding far from last week lows that lie at 0.7720.
AUD ahead of RBA
Tomorrow the Reserve Bank of Australia will announced its decision on interest rates. “The trendiness of global easing has driven traders to price-in over a 60% chance of a lower adjustment of the RBA cash rate. With a rash of G10 central banks shifting to a profoundly more dovish tone, traders have been quick to pile on to the lower RBA bandwagon. Yet the data does not support more stimulus”, warns Peter Rosenstreich, Head of Market Strategy at Swissquote.
According to Rosenstreich currently the positioning in the AUD is profoundly oversold, “suggesting even a rate cute and less then ultra-dovish, statement will should trigger significant short squeeze. Should the RBA buck the trend and wait for more factual evidence, the corresponding reversal in AUDUSD would target 0.8000.”
