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5/4 Close AUD/USD at market (now 0.7455) for +45
Its finding support right at the 38.2% Fib of this years rally (0.7450) so it could bounce from here and if it does, we’ll have the following reload orders on to take advantage of the move:
Sell AUD/USD at 0.7490 Stop at 0.7690
AUD/USD Sell entry at 0.7490 Triggered
5/4 – Lower AUD/USD Big Trade Entry to 0.7490, Stop 0.7690
New AUD/USD Big Trade
Place Order to SELL AUD/USD at 0.7530
Stop at 0.7730
The Reserve Bank surprised the market with a 25bp rate cut, sending the Australian dollar to its lowest level in more than 5 weeks. Considering that long Australian dollar positions were hovering at their highest level in nearly a year, today’s decline is mostly likely a precursor to further losses as more AUD/USD traders bail out of their long positions. Today’s decline is also significant because it takes the currency pair beyond the 50-day SMA, 75 cents and the April low. We expect a smooth ride down to 74 cents and possibly even 0.7350. Aside from their frustration with the low level of inflation an subdued labor costs growth, the “Fed’s reluctance to normalize policy and signs of global economic slowdown have clearly changed the calculus for RBA which as recently as last month appeared to be content to keep rates stationary for the foreseeable future” according to our colleague Boris Schlossberg.