RBA Rate Decision - Neutral unless Hawkish Surprise
Today AUDUSD has risen since morning anticipating good Caixin data. The better than expected release pushed price even further and gives people who trade into the news chances to take profit.
The subsequent drop of can be a combination of taking profit and also market pricing in a Dovish RBA statement due soon. Also according to IG Sentiment statistic, retail trader is net short AUDUSD pair. My take is if the RBA does send out a Dovish statement, there is not much for market to move since this is expected. The risk is on a Hawkish statement. A surprise upside will cause a lot people to reverse their positions and send the pair higher. The next major news is tomorrow GDP release and it is expected to be very good. Again, today rate statement gives us hint to prepare for tomorrow release.
Technical levels that I watched are round level 0.795. If there is a dovish statement I expect people who made the early short to take profit around this level, if there is a Hawkish statement, I will look to enter Long as price may spike to the previous week Pivot of 0.7966 (even potentially to 0.8 if tomorrow GDP is good).
The subsequent drop of can be a combination of taking profit and also market pricing in a Dovish RBA statement due soon. Also according to IG Sentiment statistic, retail trader is net short AUDUSD pair. My take is if the RBA does send out a Dovish statement, there is not much for market to move since this is expected. The risk is on a Hawkish statement. A surprise upside will cause a lot people to reverse their positions and send the pair higher. The next major news is tomorrow GDP release and it is expected to be very good. Again, today rate statement gives us hint to prepare for tomorrow release.
Technical levels that I watched are round level 0.795. If there is a dovish statement I expect people who made the early short to take profit around this level, if there is a Hawkish statement, I will look to enter Long as price may spike to the previous week Pivot of 0.7966 (even potentially to 0.8 if tomorrow GDP is good).
Comment:
Not much differences from the previous statement, it's quite Dovish thus AUDUSD is crashing back to the 0.795 level. Tomorrow GDP is still expected to be good so I'll look to fade this initial retracement and go long into the GDP news.
Comment:
The retracement was too fast and my Limit Order at 0.752 was not triggered. Likely I've missed the move..unless price to make another retracement.
Current Order: Limit Long at 0.7952 with Stop at 0.7938
Current Order: Limit Long at 0.7952 with Stop at 0.7938
Comment:
Lowe's statement is quite hawkish, which should push AUDUSD higher in my opinion
"The main conclusion from that discussion was that, in future, it was likely that the average level of the cash rate would be lower than it was before the financial crisis...A second conclusion from our discussion was that the cash rate is around 2 percentage points below our current estimate of the neutral rate. As we make further progress on both unemployment and inflation, we could expect the cash rate to move towards this neutral rate over time."
"The main conclusion from that discussion was that, in future, it was likely that the average level of the cash rate would be lower than it was before the financial crisis...A second conclusion from our discussion was that the cash rate is around 2 percentage points below our current estimate of the neutral rate. As we make further progress on both unemployment and inflation, we could expect the cash rate to move towards this neutral rate over time."