AUD Firmer on Tuesday
The Aussie Dollar is starting the week on a slightly firmer footing. Following the breakdown below the .6520 level in the middle of the month the sell off has since stalled with the pair consolidating below the level for now. On the back of the heavy decline from the .6857 level in July, the outlook remains bearish for AUDUSD while below .6520.
RBA Governor-Designate Warns Over Climate Impact
Comments from RBA governor-designate Bullock have helped underpin the Aussie today. Bullock warned that extreme weather scenarios might have an upward impact on inflation, reducing supply in the market. However, Bullock was clear to stress that the impact on inflation was not clear and as such volatility could be seen in either direction.
Falling RBA Tightening Expectations
AUD has weakened recently on falling expectations of further RBA tightening this year. Currently, the market pricing for an ‘unchanged’ decision in September is sitting around 95%. However, the bank has warned it will remain data dependent going forward meaning, should we see any surprise uptick in inflation, further rate hikes might still be seen. Should inflation continue lower, however, AUD looks likely to continue to depreciate near-term.
Technical Views
AUDUSD
The break below the .6520 level is a firmly bearish development for the pair. While below here, the focus is on a continuation lower towards the .6275 level next. Only a break back above .6520 will alleviate near-term bearishness, in which case focus will turn back to a test of the .6681 level and the bearish trend line. In the Signal Centre today we have a sell signal in the pair set above market at .6484 targeting a move back down through .64.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.