28 Jan 2015
AUD/USD: Break below 0.79 exposes 0.7860
FXStreet (Bali) - AUD/USD has extended its decline in sympathy with strong selling interest via the Kiwi, after the RBNZ held rates at 3.5%, but exceeded market dovish expectations by mentioning the possibility of the next rate decision being either 'up or down'.
In the last 24h, an article by RBA watcher Terry McCrann, has been doing the round, and according to varies market sources, it is behind the renewed selling interest in the Aussie, following the higher-than-expected RBA trimmed mean Q4 CPI yesterday. McCrann said that "the Reserve Bank will almost certainly cut the rate at its first meeting back for the year next Tuesday"
McCrann adds: "What is absolutely certain is that the key language in RBA governor Glenn Stevens’s post-meeting statement will change. That would obviously be the case if he’s announcing a 25-point cut, but it would change to “signalling a future cut” even in the now unlikely case the rate was left unchanged."
The short term technical picture for the AUD/USD pair points at continued declines, notes Valeria Bednarik, Chief Analyst at FXStreet, who notes: "The 1 hour chart shows price accelerating below the 23.6% retracement of its latest daily fall, as indicators gain bearish momentum below their midlines, pointing for a continued decline. In the 4 hours chart the price broke below its 20 SMA, while momentum turns lower above 100 and RSI holds in neutral territory. A continued slide through 0.7900, should lead to a retest of the recent multiyear low of 0.7860, while if this last gives up, the pair will likely extend towards the 0.7800 figure."
In the last 24h, an article by RBA watcher Terry McCrann, has been doing the round, and according to varies market sources, it is behind the renewed selling interest in the Aussie, following the higher-than-expected RBA trimmed mean Q4 CPI yesterday. McCrann said that "the Reserve Bank will almost certainly cut the rate at its first meeting back for the year next Tuesday"
McCrann adds: "What is absolutely certain is that the key language in RBA governor Glenn Stevens’s post-meeting statement will change. That would obviously be the case if he’s announcing a 25-point cut, but it would change to “signalling a future cut” even in the now unlikely case the rate was left unchanged."
The short term technical picture for the AUD/USD pair points at continued declines, notes Valeria Bednarik, Chief Analyst at FXStreet, who notes: "The 1 hour chart shows price accelerating below the 23.6% retracement of its latest daily fall, as indicators gain bearish momentum below their midlines, pointing for a continued decline. In the 4 hours chart the price broke below its 20 SMA, while momentum turns lower above 100 and RSI holds in neutral territory. A continued slide through 0.7900, should lead to a retest of the recent multiyear low of 0.7860, while if this last gives up, the pair will likely extend towards the 0.7800 figure."