We’ve bought a giant catalyst for the AUD proper across the nook, making the longer-term downtrend in EUR/AUD one to observe for potential commerce alternatives. Will the RBA hold the promote momentum going?
RBA to Maintain the Downtrend in EUR/AUD Going?
Downtrending charts don’t get a lot cleaner or extra textbook than the 4 hour chart of EUR/AUD above. The pair has been in a critical downtrend since mid-September, possible on hypothesis that the Reserve Financial institution of Australia should tightening financial coverage prior to beforehand anticipated as a result of excessive inflation.
It is a very totally different scenario than the euro as Europe has see financial development sluggish over the previous month, in addition to expertise vitality and provide chain points, reducing the percentages considerably that the ECB will take tightening motion on financial coverage to fight their inflation points.
Effectively, we’re going to listen to from the RBA very quickly as they’ll give their latest monetary policy statement in the upcoming Asia session at 3:30 am GMT. Expectations are for the RBA to carry on coverage, however could get extra hawkish on the time of its attainable price hike, presently anticipated in 2024.
Now, after an enormous run to the draw back like we’ve seen in EUR/AUD (from 1.6237 to 1.5360, a roughly 5.35% transfer), it’s completely regular to anticipate a “buy-the-rumor, sell-the-news” situation could play out, as some merchants would possible take some income it doesn’t matter what the RBA says. If we get the anticipated situation of no coverage strikes and hawkish rhetoric from the RBA, then a pop larger after the occasion is one to observe for a possible alternative to leap within the downtrend at higher costs, probably across the falling trendline or earlier robust space of curiosity across the 1.5500 major psychological level.
We additionally must be open to the opportunity of a draw back break of present help if the RBA does sound hawkish, and if the market does break decrease, we’ll be looking out for sustained commerce beneath that 1.5350 space earlier than contemplating establishing a brief place.
Within the low chance situation the place the RBA maintains no price hikes till 2024 or past (probably on covid fears or export weak spot as a result of falling demand or provide chain points), then that raises the chance of a swing transfer to the upside growing fairly rapidly. In that situation, we’ll be looking out for a maintain break above the falling trendline and 1.5500 degree earlier than contemplating a brief or swing time period place lengthy.
What do you all assume? Will the RBA hold the Aussie bull prepare going? Let me know within the feedback part beneath!
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