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Strong Aussie for now

Market Analysis

EURAUD, H4

The antipodean central bank left the cash rate unchanged at 1.50% for the 13th straight month, as expected, while the governor’s statement was somewhat mixed in tone, though the main takeaways were dovish leaning, including an acknowledgement of signs of slowing in the property market and a jawboning about the high exchange rate (that, if sustained, would lead to slower economic growth).

EURAUD dove to a 1.4902 low on the RBA policy announcement and statement. The pair is traded below the 1.5000 level for a third consecutive day, while it is consolidated on the 20-Day MA, since yesterday. In the 4-hour chart, EURAUD fail to break above the 20-period MA, and hence it remained on the lower Bollinger Bands pattern since August 31. Therefore a SHORT intraday position was taken, which was triggered by a Hanging Man Candle, noticed in the morning . Meanwhile, the 20-period MA crossed yesterday the 50-period MA, indicating tha weakness of the pair is likely to continue. The RSI id at 40 sloping towards oversold terittory . The entry was taken at 1.4921, with Targets at 1.4860 and 1.4820,  which are the 200-period SMA and  the 50.0 Fibonacci level respectively. Support is at near 50-period MA, i.e. 1.5000.

 The European calendar has the final reading of the Eurozone services PMI in a while, which expected to stay unchanged from Q1 and therefore EU growth expected to continue.

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Andria Pichidi

Market Analyst

HotForex

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