Early this week, on the 6th, the Reserve Bank of Australia will make its interest rates announcement. The RBA raised its benchmark six times in past year, to 4.5%, but didn’t act during the last policy meeting. It is expected that the rates will be left unchanged once again. The consensus reflects concerns of cooling Chinese economy as well as sovereign debt issue, which might or might not spread outside of Europe. Big unknown, to which nobody seems to have an answer. Also, the RBA hinted that the decision to resume rate gains will hinge on inflation figures due late this month. By all accounts, the announcement should be a quiet affair, unless we have a surprise.
Following rumored intervention in EUR-CHF by Swiss National Bank, there is more evidence that the SNB is not at all happy with the Franc appreciation. Just about a month ago the central bank announced it would no longer try to counter the currency gains. Markets responded strongly and the CHF staged another rally, close to 1000 pips against the Euro. So, the SNB is back to “closely watching” the exchange rates, which is nothing else but an intervention threat. Very rapid change of mind by Mr. Hildebrand.
On the intermediate term bases, the Australian Dollar appears to be a downtrend. In case of AUD-USD, it found a very strong support at 0.8060 and about 800 pips. Currently it is right in the middle of this range and looking for direction of the next price swing. The latest minor low and high, at 0.8315 and 0.8565 respectively, provide good breakout levels for trades either way. From my perspective, another move down is more likely and it could see the AUD-USD drop to 0.8100 or so. Potential up move is a little more difficult, because of the 100 SMA creating additional resistance not far from the last high.
Just like every Sunday, opening gaps are very possible, something to look for. So far no shocking news emerged over the weekend, but there are few more hours left and some market movers might materialize. Not from US, though, because of the Independence Day holiday. Happy 4th of July!
Mike K.
Happy 4th mate! Kepp shorting the swissy. What do you think about Germany after the demolition job on Argentina?
Thanks, buddy. Swissy? Agreed! Just a matter of timing. Show of force by Germany, no question. But you know my opinion here – Holland all the way!
Hope you are having great holiday, Mike. So hot in here its unreal.. Great summer, though. Will send you an email with some info soon. Think you you’ll like it!
Hi Mike. It is very nice that you are a fan of our little Dutch team. I follow you twitter posts and couldn’t believe that you predicted the Orange would defeat Brazil. All of us prayed for it but were afraid to voice it. Your Germany call was also spot on. Can only hope that you are right about the final result, too. If you ever make it to this part of thge world, let me know. We’ll have to celebrate. Have a great holiday!
Michelle, what summer? It is raining here… But the sunshine comes next week and then it should be nice through October. Send me all the details, but yes, we’ll do it. Looking forward!
Thanks, Vanee. Hope the remaining few games prove as intense as they should be! Go Oranje!
[...] Tight holiday ranges are typically followed by days with much more activity. For starters, the Reserve Bank of Australia will have interest rates announcement in a few hours. No change is expected and only surprise would [...]
[...] holiday ranges are typically followed by days with much more activity. For starters, the Reserve Bank of Australia will have interest rates announcement in a few hours. No change is expected and [...]
[...] Aussie put a kink in my plans for a short trade in AUD-USD, using 4H chart. Intended sell level was at 0.8310, with a fairly large objective. Yesterday and early on Tuesday [...]