26 Mar 2014
AUD/USD muted post Financial Stability Review
FXStreet (Guatemala) - AUD/USD has continued to trade and oscillate in a tight range post remarks from the RBA and their Financial Stability Review.
AUD reaction muted: Deleveraging has run its course
The reaction was limited to the RBA’s Financial Stability Review, while the markets are in the main keenly waiting for RBA’s Govenor Stevens who is speaking later on in the session at 6GMT. However we note from the above review that the RBA sees deleveraging having run its course, adding that financial conditions for business have improved. The RBA also said that many households are still paying down mortgages more quickly than required.
AUD/USD medium term looks bearish
Jane Foley, Senior Currency Strategist at Rabobank, explained that there is a rising wedge pattern is also observable and said this is a bearish signal pointing to downside risk. “The latter is consistent with signs that momentum is fading. In short the technicals suggest that AUD/USD could still go both ways from here”. However, she also went onto say, “Medium-term, downside growth risk from China and from low investment levels suggest that AUD/USD is still likely to push lower. We maintain a 12 mth forecast ofAUD/USD0.86”.
AUD/USD Levels
The 20 DMA is 0.9023, the 50 DMA is 0.8945 and the 200 DMA is 0.9139. RSI (14) reads 66.00. Supports are ascending from 0.8990, 0.9025, 0.9048 and 0.9085. Spot is 0.9161 while resistance after the highs at 0.9171 are 0.9204, 0.9260 and 0.9278.
AUD reaction muted: Deleveraging has run its course
The reaction was limited to the RBA’s Financial Stability Review, while the markets are in the main keenly waiting for RBA’s Govenor Stevens who is speaking later on in the session at 6GMT. However we note from the above review that the RBA sees deleveraging having run its course, adding that financial conditions for business have improved. The RBA also said that many households are still paying down mortgages more quickly than required.
AUD/USD medium term looks bearish
Jane Foley, Senior Currency Strategist at Rabobank, explained that there is a rising wedge pattern is also observable and said this is a bearish signal pointing to downside risk. “The latter is consistent with signs that momentum is fading. In short the technicals suggest that AUD/USD could still go both ways from here”. However, she also went onto say, “Medium-term, downside growth risk from China and from low investment levels suggest that AUD/USD is still likely to push lower. We maintain a 12 mth forecast ofAUD/USD0.86”.
AUD/USD Levels
The 20 DMA is 0.9023, the 50 DMA is 0.8945 and the 200 DMA is 0.9139. RSI (14) reads 66.00. Supports are ascending from 0.8990, 0.9025, 0.9048 and 0.9085. Spot is 0.9161 while resistance after the highs at 0.9171 are 0.9204, 0.9260 and 0.9278.