QuantumLogicTrading
Short

SELL AUDUSD - JUNE RBA MINUTES HIGHLIGHTS - DOVISH/ CUT POSSIBLE

FX:AUDUSD   Australian Dollar/U.S. Dollar
On the margin RBA remained in line with previous meetings, adding little but still keeping it on the dovish side imo. Once again, as in previous minutes (and from several other central banks) RBA continued to communicate the necessity of "watching key data" to drive future policy decisions. Interestingly though, they also mentioned the negative impact of a strong AUD which in turn supports RBA doves out there as a cut is the remedy to stop a deflationairy currency in its tracks. Further, RBA notably were under no illusions regarding their inflation situation stating " inflation set to stay low for some time" - another encouraging stimulus for doves given inflation's important position/ weight for setting future policy.

As per the attached post, i remain dovish/ bearsh on aussie$, and i continue to expect a cut to 1.50% (25bps) this year given i expect their inflation to remain stagnant. Clear targets are 0.73 when probability of a cut is higher - though i would enter shorts regardless if AUD$ could find its way to its 12m highs at 0.78, though unlikely.

I like USD strength in the medium term too hence supporting the short Aussie dollar view


RBA Minutes Highlights:

RBA MINUTES: BOARD TO WATCH KEY DATA, WILL MAKE ADJUSTMENT TO RATES IF NEEDED; REVIEW OF FORECASTS IN AUG WILL HELP STEER POLICY
- Inflation set to stay low for some time, employment mixed, retail sales look set to pick up
- Stronger AUD would complicate economic rebalancing
- Economic transition is now well advanced
alan_watch
4 months ago
bit late for the up move though... but yeah it is still good to sell at 7550 :)
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QuantumLogicTrading alan_watch
4 months ago
what do you mean? i personally wont sell ausse dollar unless i see 0.78 or a low CPI print.. not attractive at these prices + CB sentiment is very balanced.
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alan_watch QuantumLogicTrading
4 months ago
I don't see down trend ending (despite the price action creating downward channel which break up might create upward impulse + with DXY not seem to be looking to going down... unless ECB suddenly decides to go negative...
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