Aussie crosses are in focus, ahead of RBA Statement and Rate decision early tomorrow. The Reserve Bank of Australia is seen holding rates steady at the current 1.50% rate setting tomorrow, along with current account and Retail sales. The Q3 current account deficit is seen narrowing to -A$9.0 bln from -A$9.6 bln. Retail sales are expected to expand 0.3% m/m in October after the flat reading in September. Aussie is being weak against Euro and US Dollar since July, particularly after the governor of the RBA noted in his post policy meeting statement that “an appreciating exchange rate would complicate” the economy’s ongoing transition from the mining investment boom. This along with dollar strength and Eurozone growth had seen the Aussie lose against the dollar and Euro.
Ahead of RBA Statement tomorrow, AUDUSD is in focus, for a possible entry opportunities after the Statement. AUDUSD has been identifies in a Falling wedges in November, despite the downtrend of thepair seen since late August. The pair has been traded below all 3 moving averages, with long term momentum indicators moving below neutral for a while. Hence the overall picture of the pair is weak, with further weakness to follow especially on the break of the last low fractal at 0.7530.
However with falling wedge indicating a bullish movement in the short-term, only a break above the upper line of the Falling wedge, but more precisely above 0.7645 – 0.7660, could indicate a buying opportunity in the short term, and a possible retest of 200-DMA at 0.7690.
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