Good morning Forex Kings,
All eyes are on the RBA today as they provide their latest interest rate decision at 2:30pm.
If we take the Corona-virus out of the equation, recent data from Australia has been more positive. The housing market has seen a strong turn around across Australia as well as the employment data.
The AUD has taken a beating over the past month due to the Chinas economy coming to a stand still. The RBA will now decide if they will cut interest rates to accommodate the economic slow down in China, or hold and wait until next months decision.
Technically speaking the charts are suggesting we may see some strength going back into the AUD. All currency pairs are at the extremes against the AUD.
Even if there is an interest rate cut today, this could still be taken as positive. Markets will also be looking at the interest rate statement from the RBA, if they suggest they will cut and hold for the foreseeable, this will be taken as bullish. A one cut and done scenario is on the cards.
If there is a surprise hold, this will also be bullish for the AUD.
85% of Finder banking experts are suggesting the RBA will hold rates steady.
EURAUD – Daily Charts
RSI is majorly overbought reaching 80, the pair have also reached a key trend line at the top of a channel.
EURAUD – 4 Hour Charts
There is a bearish divergence on the RSI. Key support levels can be found at 1.6680 and 1.6600.
EURAUD – 1 Hour Time Frame
There is a wedge pattern forming on the 1 hour charts. We plan to place a sell position now, with a second position at the top of the wedge.
Trade Setup 1: SELL EURAUD – Market price (1.7035), stop loss set above the wedge at 1.7210, take profit target is 1.6680
Stop Loss: 175 PIPS
Take Profit: 355 PIPS
Trade Setup 2: SELL LIMIT (Entry 1.7150), stop loss set at 1.7250, take profit set at 1.6680
Stop Loss: 100 PIPS
Take Profit: 470 PIPS
We will also post a straddle trade prior to the announcement at 2pm.