On Thursday the RB of Australia kept its key interest rate unchanged at 2% but noted that inflation in the country is going to remain low which, however, allows for the rate reduction when necessary. Furthermore, in his speech today RBA Governor Glenn Stevens signalled that the regulator is ready to ease monetary policy further. As the economy of Australia highly depends on export revenues, the country needs cheaper currency to compensate for falling exports.
Support and resistance
The pair remains in a downward trend since July 2011.
A breakdown of the lower border of a correctional ascending channel on the daily chart at the level of 0.7095 would send the pair towards 0.6985 and 0.6910 (September and year lows).
Long positions can be considered after a breakout of the levels of 0.7180 (ЕМА200, ЕМА144 on the 4-hour chart) and 0.7190 (ЕМА50 on the daily chart). In this case, the pair can grow to the levels of 0.7360, 0.7410 (ЕМА144 on the daily chart and August highs), 0.7500 (23.6% Fibonacci correction and upper border of the ascending channel on the daily chart).
OsMA and Stochastic on the 4-hour, daily and weekly charts recommend short positions.
Support levels: 0.7100, 0.7070, 0.6960, 0.6910.
Resistance levels: 0.7155, 0.7170, 0.7190, 0.7325, 0.7380, 0.7400, 0.7430.
Short positions can be opened below the level of 0.7115 with the target at 0.7070 and stop-loss at 0.7140.
Long positions can be opened above the level of 0.7160 with the target at 0.7210 and stop-loss at 0.7130.