Technical data of the currency pair:
Previous closing: 0.7038; Daily range: 0,7003-0,7050;
Opening: 0.7038; 52-weekly range: 0,6824-0,8168;
Annual income: -10.11%; Change in % for the previous day: -1.24;
- Yesterday, the currency pair AUD/USD hardly reaction to the decision adopted by the RBA. As expected the Reserve Bank of Australia has left interest rate unchanged at the level of 2.00%;
- At the press conference RBA executives said that the interest rate can be reduced this year in order to maintain the pace of economic development. The rate can be reduced by 0.25%;
- China is an important strategic partner for the Australian economy. The largest share of country’s exports accounts for this region (over 25%). The AUD depends of the economic state in China. Currently, China is facing serious economic problems: the outflow of capital from the country amounted to 1 trillion USD last year, plus to this the country suffers devaluation of the Yuan and slowdown of economic growth;
- The AUD is a commodity currency. Australia is an export-dependant country, which sells commodities in the foreign markets (such as gold, oil, iron ore, ect.) Consequently, the decline in the AUD against the USD has caused significant decline in the commodity prices over the last year;
- This week, we expect the release of important economic US data, which can have a strong impact on the currency rate. On Friday, 5 February non-farms payrolls will become known.
- In the last few days the currency pair has been unsuccessfully trying to exceed resistance level of 0.7130. In the near future RBA policy will not be aimed at strengthening of the AUD. China is facing serious economic problems. Commodity market is in the downtrend.
- In the short-term the AUD can fall against the USD. It is recommended to find entry points to the market for opening short positions.
Trading tips for the currency pair AUD/ USD
Long term trading: We do not expect strong changes in the movement of the Australian dollar prior to the release of non-farm payrolls on Friday, 5 February. Presently, we recommend to refrain from opening long-term trades on the currency pair AUD/USD. It is advisable to look for the entry point after statistic release on Friday, retesting of the key support and resistance levels and receiving respective confirmations(such as patterns Price Action).
Medium-term trading: The AUD managed to break down resistance level of 0.7040 and consolidate above it. We recommend to open short positions if at testing this level there will be reversal patterns (for example, “lower high”, or “short squeeze”). Risk per trade is no more than 2% of the capital. Stop-order can be placed at the level of 0.7075.