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RBA

Australian dollar stems bleedingAfter three losing sessions, the Australian dollar has steadied.  AUD/USD is currently trading at 0.7305, up 0.17% on the day. In the Asian session, the Aussie dropped to 0.7277, its lowest level in a month. The Australian dollar didn't get any help from the October employment report, which was showed total employment declining and the unemployment rate rising. The economy shed 46.3 thousand jobs, marking a third straight decline. Unemployment rose to 5.2%, up sharply from 4.6%. The markets gave a thumb down to the news, sending the Australian dollar below the symbolic 0.73 level. It's hard to sugarcoat the dismal job numbers, but help may be on the way, with the lockdowns being lifted in Sydney and Melbourne. As the economy continues to re-open, we can expect employment data to improve. The RBA is carefully monitoring inflation levels, which have been on an upswing and could become a major headache for the central bank. Core CPI has broken above 2%, the RBA's lower limit of its inflation target. As well, the Melbourne Institute consumer inflation expectations for November surged to 4.6% y/y, the third straight month above the 4% level. If inflation and inflation expectations continue to climb, the RBA will find it difficult to convince the markets that inflation is transitory and may have to make a hawkish shift at its policy meeting in December. We continue to see a disconnect between RBA guidance and market expectations, but the central bank is starting to sound more hawkish. In its quarterly summary of the economy, the RBA acknowledged that inflation has risen into its 2-3% target band, a full two years earlier than anticipated.  Governor Lowe had insisted that rates would not rise before 2024, but in the summary, the bank said that a rate hike was possible in late 2023. Still, the markets remain much more hawkish and have priced in several rate hikes for 2022, with the cash rate projected to approach 1.0% by the end of next year. 0.7330 is a weak resistance line and could be tested during the day. 0.7506 is next There are support lines at 0.7254 and 0.7154
by OANDA
ASX 200 @ 2 NOV 20212 November 2021 – Market Watch The last time I did an analysis on the S&P/ASX 200 was on 26 October (red arrow). I said that it was good that Blue Arrow No. 4 didn’t look likely to take place and that’s a good sign for the short-term. How wrong I was as the ASX 200 quickly retraced to fall below the (i) 7400 psychological support, (ii) short-term support, and (iii) mid-term support. In last Sunday’s FB livestream, I was lamenting that the US indices continue to create new all-time highs but the ASX 200 tries to find every opportunity to disappoint. A head-and-shoulder chart pattern is forming and a break at the neckline (7250 levels) could spell trouble for the short- to mid-term. With last week’s inflation numbers coming in higher than expected, investors are pricing in an early interest rate hike. Today, the Reserve Bank of Australia’s (RBA) Governor did nothing to calm investors’ nerves by not reiterating that official interest rates will not be increased until 2024. Interest hikes are a tool to counter the rise on inflation. Inflation is usually a sign of the broader market recovering more people re-joining the workforce, increase in wages, increase in spending, etc. At the same time, interest hikes also mean that the cost of borrowings will increase and thus, temper any potential spending sprees like properties, quick business expansions, etc. As seen in the US in late September, any talk of bond tapering can spook the markets as that is a precursor to interest rate hikes. With no confirmation that the RBA will wait till 2024 to increase rates, there is a potential that the ASX 200 will see more downwards pressure in the coming days. The US markets recovered from their September scare to create new all-time highs. How about the ASX 200? Will it recover above 7600? Or are we looking at a re-test of the 7150-7250 support zone again? I’m personally avoiding the big caps while being more selective with my purchases. How about you? Is this another opportunity to average down? Or are you waiting for more signs of recovery? If you find this market analysis helpful, let me know in the comments. May the markets continue to be with us!
ASX:XJO
by Jerm88
The AUDJPY ahead of the RBACurrently the AUDJPY is set up in a wedge. Some would call this a bullish wedge as the highs are constant near the 86.00 level and the lows are higher. However, since this is a major resistance from the spike highs back in May 2021, we are just going to consider this as major resistance, especially with the RBA rate decision overnight. A move above the 86.00 level would be very bullish for the pair, but a break below the 84.70 level would hear calls for a longer term double top. Price action the 24hrs following the RBA decision will be key for the pair. 
by ForexAnalytix
Aussie Yields Exploding!· The prediction I made of Australian Yields needing rebalancing earlier in the year points to slightly above average AUD buying throughout 2021 finally came to fruition. · NZ and AU 10Y Yields bounced strongly first after the sweep of lows. The analysis of the starting position showed us that the control now exists on the bid; because we know that it is the path of least resistance, so the rule is; when the market is strong we are buyers and when weak, we are sellers. · Commodity shortages/outperformance means that the signal is strong to stay long AUD and reduce hedges, adding to domestic AUD exposure.
TVC:AU02Y
by ridethepig
5
Breaking cooking in AUDJPY Clarity around the nucleus of the swing designed to restrain It is an interesting breakout we have here in the diagram, representing a major impulse (sounds nice, right?!), and so the origin is a hawkish fed and evergrande mini deal; I want to clear something up as I know there is a lot of panic on the wires with some looking at the lows. There is a major classification problem; For those technical traders that understand the creation of an outside candle, it is a way to restrain extremes and neutralise opponents via the open trap. In this position, a lot stood like a dear in the headlights into Fed with the majority of threats: one clearly consists of the taper advance, the other in evergrande etc. So where does the restrain come from? Well by blocking 78/79 then possibly a momentum break through 79 quarters and getting into 80. The whitespace is clear, the difficult work has been done, the above mentioned diversions opened up an attacking radius!
Long
by ridethepig
3
AUDUSD might aim towards 0.700 support shall the trendline breakThe path of least resistance towards 0.7000 psychological support is open for AUDUSD to test, provided that the trendline breaks. Shall the trendline break, the daily candle also needs to pierce and close below S1 monthly support. Once this happens the price will likely target S2 support that lies just below 0.70000 support. Shall the criteria take place, it would be good to exit the trade at 0.7000 psychological support rather than S2 support. Await updates in the comment section
Short
by FX618Analysis
Dovish Tapering Locks In QE (08 September 2021)The dovish tapering decision. During its monetary policy decision yesterday, the Reserve Bank of Australia (RBA) kept its cash rate unchanged at 0.10%. As promised, the central bank proceeded with its quantitative easing (QE) tapering plan announced back in the July’s meeting. What came as a surprise is the duration of the new round of QE. Previously, the RBA opted for a two-month QE duration. But during the announcement yesterday, the central bank decided to extend the duration by five months instead. Thus, the tapered A$4 billion QE will run from September until at least February 2022. As a result, the Australian dollar strengthened for a brief period of time before weakening across the board, reflecting the dovishness as a result of the extension of the QE duration. Delta variant still a concern to the RBA. Despite RBA Governor Lowe saying previously that fiscal policy will prove to be more effective than monetary policy in providing aid at the moment, this does not deter the central bank from making a more cautious decision. As explained in the rate statement, the RBA’s decision to extend the QE duration “reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak”. Rate hike remains out of sight. As with the previous meetings, the RBA continues to reiterate that its cash rate will not be increased until inflation falls within the 2-3% target range and this condition will not be met before 2024 based on their current projection.
by GH_Lee
RBA to Catalyse a New Correction on AUDUSD At its monetary policy meeting from earlier today, the RBA observed worsening growth prospects in Australia due to the Delta variant. These muted forecasts for Q3 are likely to prompt a correction on AUDUSD's uptrend. The uptrend continues to be active, as underpinned by the ADX indicator, which has been threading above the 25-point threshold for quite a while. However, the crossover on the MACD implies the resurgence of bearish momentum in the short term. Meanwhile, the emergence of a Hanging Man candle from the upper limit of the ascending channel means that the correction may have already started. The price action is likely to drop to either the 23.6 per cent Fibonacci retracement level at 0.73907 or the 38.2 per cent Fibonacci at 0.73364 before bulls can regain control.
Short
by Trendsharks
Aussie rally pauses ahead of RBAThe Australian dollar is in negative territory on Monday, after flexing some muscle last week. AUD/USD is trading at 0.7430, down 0.35% on the day. The currency shot up 1.94% last week, as investor appetite for risk improved, which was bullish for minor currencies like the Australian dollar. The Australian dollar ended the week on a high note, with strong gains of 0.75%. This was in response to a shocker from US nonfarm payrolls on Friday, which added just 235 thousand jobs. The consensus was around 750 thousand jobs and some analysts were even calling for a print north of the 1 million mark. The soft NFP reading effectively put on hold any expectations that the Federal Reserve would signal tapering at its policy meeting later this month, and that has weighed on the US dollar. The Aussie has reversed directions on Monday, but I would not read too much into that, as US markets are closed for Labour Day, and liquidity is thin, which could account for the US dollar bouncing back on Monday after a poor showing last week. The RBA holds a policy meeting on Tuesday, and the markets will be keeping a close eye on what the central bank decides with regard to a planned taper. At the August meeting, policy makers adhered to plans to taper weekly bond purchases from AUD 5 billion to AUD 4 billion. Since then, the economy has taken a hit from prolonged lockdowns due to the Delta variant of Covid-19, and GDP in the third quarter may have contracted by as much as 3%. The big question is will the RBA feel that a taper is warranted, given that economic conditions are not all that favorable. If the central bank says that it will begin a taper next month, the Australian dollar could respond with strong gains.
by OANDA
1
AUD Versus NZD: A Fundamental Outlook and TradeFundamentals: It has been a hawkish month for the Reserve Bank of Australia. The recent meeting suggests that their guidance ramps up into a more hawkish tone. Both monetary and fiscal policies are aussie positive, so far. One thing I keep in mind is their fiscal policy in response to the current covid-19 lockdowns. I believe that the Reserve Bank of New Zealand is overly hawkish, given their currency price. For the next few weeks, the AUD currency give us a more underdog positioning to exploit versus the NZD currency. Technicals: (1) Monthly support (2) 61.8% fib (3) Oversold indicators (4) Divergence (5) RSI at extreme levels Daily: Weekly:
Long
by Rocketman
AUDUSD - Short Below Key ResistanceAUDUSD has consolidated below at 0.748 and we expect below this resistance level the currency pair to move lower toward the psychological 0.7 level. Non farm payrolls came in at 943K vs 870K forecast boosting the US dollar as Australia continues to be impacted by the covid delta variant. Additionally, treasury yields have risen on the back of the strong payroll number as the markets expects the FED to taper sooner. Next week we await key economic data releases including US retail sales as well as RBA meeting minutes and FOMC meeting minutes for any significant price action.
Short
by KQMarkets
'Giant Panda' leaving a miasmaFurther downside possible, but looks short-lived while above 200MA and importantly 0.703x. A lot of noise from the region, with PBOC lifting the bid temporarily and clearing the way for the test of 0.703x. This is an important area structurally as those with a background in waves are tracking for the beginning of an impulsive wave 3 inside a major. Here looking to add bullish exposure between 0.723x and 0.703x, expecting 200MA to hold but a sharp spike is still open via inflation today...the cheaper the better if you ask me. Confidence in the view will increase above the (a) at 0.753x and indicate a strong base is forming. As always, start counter trend positions as a hedge, and then when it really starts working, swing for the home run.
Long
by ridethepig
7
QE Tapering Plan Will Go On (06 August 2021)Three days ago, the Reserve Bank of Australia (RBA) delivered a little surprise when it decided to stick with its quantitative easing (QE) plan announced back in July despite the recent spike in COVID cases in Australia. (Refer to my post "RBA Sticks With QE Tapering Plan (04 August 2021)" on RBA monetary policy) Details on why the central bank decides to proceed with its decision on QE tapering were provided during Governor Lowe testimony earlier today. Lowe’s Testimony During his testimony before the House of Representatives Standing Committee on Economics, Governor Lowe said that the RBA has considered holding back its plan for QE tapering during the monetary policy meeting. However, the central bank’s positive projections on the economic growth for 2022 permitted the plan to continue. Lowe explained that “any additional bond purchases would have their maximum effect at that time and only a very small effect right now when the extra support is needed most.” Furthermore, he mentioned the RBA felt that fiscal policy would be more appropriate than monetary policy in terms of providing aid at the moment. Nonetheless, the flexible approach of its QE programme allows the central bank to make adjustments to the rate of bond purchases in response to any unexpected turn of events. On the subject of the RBA cash rate, Lowe highlighted that the central bank will not be increasing cash rate until inflation is sustainably in the 2-3% range. He emphasised that the RBA needs to be confident that inflation will remain within the targeted range before any rate hike is considered. Finally, Lowe said that the condition for a rate hike “is not expected to be met before 2024”. RBA economic projections. For year 2021, Australian GDP: 4.00 (4.75) CPI Inflation: 2.50 (1.75) Unemployment Rate: 5.00 (5.00) For year 2022, Australian GDP: 4.25 (3.50) CPI Inflation: 1.75 (1.50) Unemployment Rate: 4.25 (4.50) For year 2023, Australian GDP: 2.50 (N/A) CPI Inflation: 2.25 (N/A) Unemployment Rate: 4.00 (N/A) *Figures shown in parentheses refers to projections from May 2021
by GH_Lee
RBA Sticks With QE Tapering Plan (04 August 2021)The RBA’s decision. During their monetary policy meeting yesterday, the Reserve Bank of Australia (RBA) kept its monetary policy unchanged, holding interest rate at 0.10% and quantitative easing (QE) at a rate of A$5 billion per week. A little surprise. With the recent spike in COVID cases in Australia due to the highly contagious Delta variant, the market was anticipating the RBA to announce the holding back of their QE tapering plan that was made during the previous meeting. However, the central bank stuck to its tapering plan of A$4 billion per week that will run from early September to at least mid-November. RBA downplayed impact of virus outbreaks on economic recovery. Although the RBA decided to stick with its QE tapering plan, it did acknowledge that the recent virus outbreaks are “interrupting the recovery and GDP is expected to decline in the September quarter”. Nonetheless, the central bank is confident that the Australian economy will rebound quickly after getting hit by the outbreaks as justified by previous occurrences. Impact on the Australian dollar. The Australian dollar strengthened as a result of the RBA sticking with their QE tapering plan.
by GH_Lee
AUDUSD bulls attack monthly hurdle on hawkish RBAThe Reserve Bank of Australia’s (RBA) keeping of September tapering on the table, despite covid woes at home, offered over 40 pips of immediate upside to the AUD/USD pair on the announcement. However, the quote remained below a one-month-old horizontal hurdle surrounding 0.7400–7410 and seems to ease of late. Although firmer RSI and RBA’s hawkish title favor AUD/USD bulls to cross the 0.7410 hurdle, 200-SMA near 0.7455-60 adds to the upside barriers before directing the quote to the mid-July top near the 0.7500 round figure. In a case where the quote steps back from the stated resistance, as it did the last Thursday, 0.7350 may return to the charts. However, any further weakness of the pair will be challenged by a two-week-old rising support line near 0.7330. If at all the AUD/USD bears dominate past 0.7330, the yearly bottom surrounding 0.7290 will be the key before direct the quote towards the October 2020 tops surrounding 0.7245.
Short
by MTradingGlobal
AUDUSD again crosses seven-week-old hurdle on RBA movesDespite pouring cold water on the face of monetary policy adjustment hopes, the Reserve Bank of Australia (RBA) manages to keep AUDUSD at the front of the G10 gainers. The Aussie central bank refrained from widely teased yields targets while also signaling a plan for further bond purchases during Tuesday’s monetary policy meeting. However, downbeat US dollar and hawkish comments from Governor Philip Lowe back another move beyond the falling trend line resistance, previous support, from mid-May after failing to stay beyond the same during late June’s upswing. Given the bullish MACD and RSI recovery, not to forget the 200-DMA breakout, buyers are likely to overcome the June 25 top surrounding 0.7615 during the latest run-up. Though, early June lows near 0.7645 will test the AUDUSD bulls afterward. Meanwhile, failures to stay past 0.7570 confluence comprising 200-day SMA and the stated trend line, will recall the AUDUSD sellers targeting the 0.7500 round figure. However, bears will again be questioned by a falling trend line from early February, near 0.7475, during any further weakness past 0.7500. It should be observed that the pair’s bearish trend remains in play despite the latest recovery moves.
Long
by MTradingGlobal