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RBA

RBA and May31 Rate DecisionFundamentals: The RBA in December's meeting was a hawkish stance. This suggests that going forward, their monetary policy will continue to be hawkish. Coupled with that, given the pandemic's effects on the Australian economy, the Australian government's fiscal policy will be at the forefront of their minds in stimulating their economy. This is a two for one punch and should have effects on the Australian currency. Conclusions: We have a country that is forced in a corner to take action by their own desire and resolve to prop up their economy. We have a situation where risk has the potential to prevail should the economy is able to recover from the lockdown measures that took place recently. We have a populace that is mobile, able and ready to work should the pandemic situation has improves. This is potentially, good news for the currency. Trades: AUDNZD and AUDUSD
Long
by Rocketman
AUDUSD: Be Cautious Going Short! Multiple Resistance In The WayBearish RSI divergence on 4H charts. Is the price loosing momentum? is there consolidation ahead? Well, we should NOT expect the price to HIT 0.7000 straight away if the ascending 4H trendline breaks! The reason being simple, THERE ARE MULTIPLE RESISTANCE PRESENT IN THE WAY UNTIL WE REACH 0.70000 LEVEL! Just observe the chart and you would notice these obstacles. To trade this opportunity with extreme caution, it is advisable to break and trade. Focus on each individual level breach and trade accordingly. There is a risk that the price might reverse from any of these levels should the trader decide to take profit in one go at 0.7000. So breaking and trading on each individual level breach might be the best action a trader could execute in such conditions. Just observe the chart, no further explanations is needed here for now. Cheer, I hope you found this insight helpful & Happy Holidays
Short
by FX618Analysis
Australian dollar trading sidewaysTis the week of Christmas, which means eggnog, crackling fireplaces and thin liquidity in the markets. With Australian markets closed on Monday, the Aussie has shown little movement today and this should continue in the North American session. There are no Australian events on this week's calendar, so any movement of AUD/USD will come from events abroad. The US has mostly tier-2 releases this week, so events in China may have a magnified impact on the Aussie. There were some positive developments on the weekend in China. The PBOC said it would provide more support for the economy. As well, there were media reports that Evergrande has resumed most its home construction projects. The mammoth company owes more than USD 300 billion in liabilities, and any news concerning Evergrande could have an impact on the Australian dollar, as China is Australia's largest trading partner. With a very light calendar, market participants will have some time to focus on the RBA, which has been in the headlines frequently in recent weeks and published the minutes of the December meeting just last week. The minutes were cautiously optimistic. with the bank saying that it did not expect the Omicron variant to derail the economic recovery. Still, the bank noted that Omicron "posed additional uncertainty for the near-term outlook." Given the disparity between RBA guidance and the markets' expectations for a rate hike, this language is a signal that the bank has no intention of raising interest rates anytime soon. The month of December is all about volatility, and the Australian dollar has already delivered on that front, with significant movement. Liquidity will be thin as we head towards the New Year, which could mean further volatility, especially if there are further developments surrounding Omicron, good or bad.   0.7288 has held in resistance since mid-November. The next resistance line is at 0.7354 There is support at 0.7119 and 0.7016
by OANDA
AUDUSD: INVERSE HEAD & SHOULDER PATTERN COMPLETE ON 4H CHARTSAUDUSD is has completed an inverse head and shoulder pattern on 4H TF. Now it has set firm sight on the next high at 0.73400 which also happens to be an upper end of a descending parallel channel on daily TF. Strong concrete support lies at 0.7000 monthly support. This analysis is not meant to be a trading signal nor financial advice! Its highly advisable to perform your own analysis and trade markets at your own risk. Please LIKE & FOLLOW if you found this analysis helpful in assisting with your own personal analysis. Cheers
Long
by FX618Analysis
EURAUD: Nice long setupLooks like we have a 2.61R potential trade in the Euro vs the Aussie dollar here. I'm long, thinking it can easily hit the target zone, considering that the $EURUSD down trend signal in the daily chart has panned out, $DXY hit the weekly target, and timing for a daily move in $EURUSD has elapsed, implying a possible mean reversion or reversal move in that pair. $AUDUSD is acting weak, and the ratio shows a good reward to risk high probability Time@Mode setup. Seems like an easy win. Best of luck! Cheers, Ivan.
Long
by IvanLabrie
2
AUDJPY Swing trade + Fundamental DriversHello Traders! A technically and fundamentally appealing trade is developed in the Australian Dollar Against the Japanese Yen pair. Enter at lower timeframe trend line break. Stops below the last supply zone. Take profit at the swing highs. Fundamental Drivers: Australian Dollar (AUD) Fundamental Bias: Neutral 1. The country’s economic and health developments There are 4 key drivers we are watching for Australia’s med-term outlook: The virus situation – a Q3 GDP contraction is priced in, so eyes are firmly on Q4 data to see whether a strong rebound is possible. Look out for any good news with more reduction of lockdown measures. China – the slowdown in China is important as it’s Australia’s biggest export destination. Markets are watching to see whether the CCP and PBoC steps up with stimulus for the economy and possible support for the real estate sector. Politically, the recent defence pact between the US, UK and Australia could see retaliation from China against Australian goods. Commodities – Iron Ore, (24% of exports) have continued its drop, and to make matters worse we’ve seen Coal (18% of exports) prices are pushing lower alongside it. This is negative for Aus terms of trade and definitely a risk to keep on the radar in the sessions ahead. Global growth – as a favourite risk proxy, the market’s current question about whether we see a reflation in Q4 will be an important consideration for the AUD. 2. The Monetary Policy outlook for the RBA The RBA’s November decision can be summed up as hawkish in deed but dovish in word. The bank abandoned YCC as markets suspected as they didn’t choose to defend their target in the days leading into the meeting, and they also abandoned their date-based forward guidance that said a lift off in rates would only be appropriate in 2024, by rather saying that conditions for a hike will take ‘some time’. However, Governor Lowe tried his best to sound as dovish as possible by saying that they are prepared to look through temporary spikes in inflation and that market pricing for a hike by 2022 is far away from where their outlook is and is highly unlikely. Even though not all market participants would agree, we think the outlook for growth, inflation, employment and wages do suggest that a late 2022 could be possible, especially if the economy sees a solid bounce back from covid. However, for now, the bank has stuck to an overall dovish tone. Given the importance of wages to their inflation outlook, keeping close track of this week’s Q3 wage growth will be very important for the AUD. 3. Developments surrounding the global risk outlook. As a high-beta currency, the AUD benefited from the market's improving risk outlook coming out of the pandemic as participants moved out of safe-havens. As a pro-cyclical currency, the AUD enjoyed upside alongside other cyclical assets supported by reflation and post-recession recovery best. If expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the AUD in the med-term, but recent short-term jitters are a timely reminder that risk sentiment is also a very important short-term driver. Japanese Yen (JPY) Fundamental Bias: Bearish 1. Safe-haven status and overall risk outlook As a safe-haven currency, the market's risk outlook is the primary driver of JPY. Economic data rarely proves market moving; and although monetary policy expectations can prove highly market-moving in the short-term, safe-haven flows are typically the more dominant factor. The market's overall risk tone has improved considerably following the pandemic with good news about successful vaccinations, and ongoing monetary and fiscal policy support paved the way for markets to expect a robust global economic recovery. Of course, there remains many uncertainties and many countries are continuing to fight virus waves, but as a whole the outlook has kept on improving over the past couple of months, which would expect safe-haven demand to diminish and result in a bearish outlook for the JPY. 2. Low-yielding currency with inverse correlation to US10Y As a low yielding currency, the JPY usually shares an inverse correlation to strong moves in yield differentials, more specifically in strong moves in US10Y. However, like most correlations, the strength of the inverse correlation between the JPY and US10Y is not perfect and will ebb and flow depending on the type of market environment from a risk and cycle point of view. With bond yields looking a bit stretched at the current levels any decent mean reversion is expected to be supportive for the JPY, so it remains a key asset class to keep track. Have a great week! Regards Vitez
Long
by Vitezabraham
Steady AUD & Weak YEN Could Make AUDJPY HIT 89.000AUDJPY could target the next high at 89.00 as the path remains clear with least obstacles. TECHNICAL ANALYSIS On the MONTHLY TF the monthly candle closed ideally above 85.000 crucial psychological resistance, indicating that the price is ready to head higher. On the main weekly chart we can see the price failed to break the higher high at 86.00, which is very crucial as the break here would likely remove all obstacles for the price to target the next high at 89.00. Therefore to trade with high probability, the weekly candle must first close above 86.00. Once this happens, the price is highly likely to target 89.00 without much obstacles on the way up. The ascending channel kind of acts a guide for the price to climb steadily with both M & W EMA acting as strong dynamic support. FUNDAMENTAL ANALYSIS Now here is the bold statement: WEAKER YEN & STEADY AUD should make AUDJPY appreciate! Japan's economy faces a tough road ahead compared to its G-7 peers, with the lowest projected rate of growth for 2021, according to the International Monetary Fund. The supply-chain issues plaguing the global economic landscape have hit Japan especially hard. Japan's gross domestic product contracted an annualized 3.0 percent on year in the third quarter of 2021. On a seasonally adjusted quarterly basis, GDP sank 0.8 percent - again missing forecasts for a fall of 0.2 percent following the downwardly revised 0.4 percent gain in the second quarter. For the AUD its not a surprise that USD CPI reading last week caused the currency to depreciate. Last week the NAB business conditions and confidence data came in stronger than last month, as did the Westpac consumer confidence survey. The downside for the AUD came via the jobs numbers last week. The unemployment rate rose to 5.2% VS 4.8%. Employment fell by 46K VS 50K. 26th September to 9th October was the period covered for this data. Therefore this did not capture a large amount of population coming out of lockdown. Next month’s jobs data will play a major role and show us how is the economy faring. Considering all this. the AUD might appreciate especially against the weaker currencies like the YEN and we could well see AUDJPY HIT 89.00.
Long
by FX618Analysis
AUD rises, RBA minutes nextThe Australian dollar has started the week in positive territory, extending the gains seen on Friday.  AUD/USD is currently trading at 0.7364, up 0.47% on the day. It's a light calendar in  Australia this week, with no major economic releases. The highlight from Down Under will be the RBA minutes from the November meeting, which will be released on Tuesday. The RBA didn't adjust the cash rate or its bond-purchase programme at the meeting, but did abandon its yield curve, which was an important component of its monetary policy. The central bank retreated after trying unsuccessfully to defend a 0.10% target on 3-year Australian bonds, and the Australian dollar fell sharply in response. Given this latest drama with the RBA, the minutes could prove to be a market-mover. With core CPI rising to the bank's target band and inflation expectations above 4%, the RBA's message that inflation is transitory is becoming a tough sell to sceptical markets. Governor Phillip Lowe has not veered from this stance that the bank will not raise rates before 2024, but I would not be surprised if the minutes show that some bank members are in favour of an earlier date. We continue to see a disconnect between RBA guidance and market expectations, which is certainly not an optimal situation, as it puts the RBA's credibility at risk. The markets are much more hawkish than the RBA and have priced in several rate hikes for 2022, with the cash rate projected to approach 1.0% by the end of next year. Will the RBA stick to its guns, or will it become more hawkish? Investors will be hoping for some clarity, or at least some clues from bank policy makers in the minutes as well as at the December policy meeting. There is resistance at 0.7416. 0.7502 is next There are support lines at 0.7261 and 0.7192
by OANDA
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