AUD/USD At a Critical Juncture Ahead of the RBA Rate Decision (0.9182)

The Aussie was steady in the NY session as mixed stocks gave no clear direction in the near term.

While uncertainty surrounding Dubai World’s debt prevailed early in the session, U.S. stocks changed courses near the close as headlines crossed that the bank was in “constructive” talks to restructure $26 billion worth of debt.

Risk currencies rallied alongside stocks but moves were moderate.

The Australian Dollar has an important day ahead, as we not only see the latest RBA rate decision, but also the building approval figures and the Chinese manufacturing purchasing managers index.

With Dubai’s recent debt issues and Aussie’s reliance centered on China’s economic growth, the RBA will have a tough decision at Today’s meeting.

At its last meeting, the RBA raised rates by 25bps to 3.50% and delivered dovish comments that noted the pace of future rate hikes as an “open question”.

Although a greater part of the market expects rates to be hiked by 25bps to 3.75%, investors can not exclude a no change decision.

The Aussie is at a critical juncture just below its bullish daily trend line and along two coinciding Fib levels. The impact of the decision will be somewhat hard to measure, subject to the Chinese manufacturing data.

A rate hike will be seen as Aussie positive, as long as manufacturing news in China remains stable. A disappointing manufacturing news would dampen risk appetite across the board, which will put more focus on the RBA rate decision. No matter the outcome, the Chinese data will be at the forefront of investors.

AUD/USD, currently trades at critical level, 0.9182, which coincides with the bottom part of the bullish trendline, as well as the 50.0% Fib. (0.9408 – 0.8948) and the 61.8% Fib. (0.9326 – 0.8948)

The near term outlook is mixed as key economic events are expected to impact the pairs next move. A neutral stance is the preferred strategy.

The pair broke below its bullish daily trend line Friday to shift the near term bias slightly bearish. However, the results from tonight’s key events should decide the near term bias.

From current levels, 0.9170, the pair finds initial support at 0.9123 (pivot point), followed by  0.9040 and 0.8990.

Above current levels (0.9170), the pair finds initial resistance at 0.9194, followed by 0.9241 and 0.9279.

TREND

Near Term: Neutral
Medium Term: Neutral
Long Term: Bullish

Trading levels in play:

We recommend to stand aside ahead of key data. There are no solid trade recommendations at the moment for intraday moves.

DISCLAMER: The above post is for information only. Before making your investment decisions please acknowledge that the information provided herein should not be taken without your own individual assessment and extensive investigation, it should not be preempted as your own trading strategies, investment advice and/or trading portfolio.
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