$AUDUSD Further Action from RBA will be needed
After sideways action for a few days we had a break of key resistance at .78800 area.
Breaking this key resistance shows some real buying interest in this pair in the short term,
See related idea (Short term rally of AUDUSD)
Currently there is major resistance near the large declining channel around the .8000 area.(Pink)
In the long-term, there is no fundamental shift in view to suggest the end of the current downtrend. (Market expecting a rate cut)
Resistance here (.7880). We do see this resistance to hold.
Key data to look at
1) Jobless rate has hit a 12-year high of 6.4 per cent last month. We want this to continue higher to feed the bearish trend.
2) The RBA is concerned with investments outside mining if they appear to be ok. That will deter a rate cut.
3) If Wage growth is still decreasing that could support a rate cut. Retail is important.
I believe a rate cut is a coin toss currently with the housing bubble Australia is currently facing. A rate cut will only make it worse.
Therefore we need to see action from the RBA on where they are leaning before we see a major continuation of this bearish trend.
Currently it seem to be dominated by USD weakness in the short term.
Breaking this key resistance shows some real buying interest in this pair in the short term,
See related idea (Short term rally of AUDUSD)
Currently there is major resistance near the large declining channel around the .8000 area.(Pink)
In the long-term, there is no fundamental shift in view to suggest the end of the current downtrend. (Market expecting a rate cut)
Resistance here (.7880). We do see this resistance to hold.
Key data to look at
1) Jobless rate has hit a 12-year high of 6.4 per cent last month. We want this to continue higher to feed the bearish trend.
2) The RBA is concerned with investments outside mining if they appear to be ok. That will deter a rate cut.
3) If Wage growth is still decreasing that could support a rate cut. Retail is important.
I believe a rate cut is a coin toss currently with the housing bubble Australia is currently facing. A rate cut will only make it worse.
Therefore we need to see action from the RBA on where they are leaning before we see a major continuation of this bearish trend.
Currently it seem to be dominated by USD weakness in the short term.
