AUDUSD trades 0.12 percent lower at 0.6965 making fresh 2 – week lows after the Reserve Bank of Australia Governor Lowe in a speech said that it’s reasonable’ to expect lower rates for longer time. Here are the key points:
RBA is prepared to ease policy further if needed
Uncertain if demand will be strong enough, if not will need further stimulus
Global disputes on trade, technology making businesses reluctant to invest
Does not see a rapid rise in credit growth ahead
More borrowing is the risk of an extended period of low rates
Wants govt to have strong agenda to drive investment, employment
AUDUSD continues south for fifth consecutive day after a failed break above 0.7080 the previous week. Fundamental data do not support a move higher as the recent Aussie data disappoints. On the downside first support now stands at 0.6957 the 50 day moving average, a level that if breached will signal the closing of long positions that started to follow the recent uptrend and some traders may enter short positions targeting the 0.6909 low from July 10th. A wait and see stance on the pair looks like the best strategy for now. On the upside immediate resistance stands at 0.7007 the high from yesterday while more offers will emerge at 0.7015 the 100 day moving average. The short term momentum for AUDUSD is clearly bearish for now and a move to lower levels looks possible.Don’t miss a beat! Follow us on Twitter.