Although I haven’t had a chance to read Governor Lael Brainard’s speech yet, judging from the moves in the market it wasn’t bullish for the Dollar! (how about state the obvious)…

I have read and digested the statement from RBA’s Govenor Lowe, some bullet points of which can be found below:

RBA Statement Notes
• Cash rate unchanged at 1.5%
• Global economy improving
• Labour markets have tightened and continued above trend growth is expected in a number of advanced economies
• China growth being supported by increased spending on infrastructure and property but high debt levels present medium term risk
• Deterioration in Australia’s Terms of Trade over the coming years will weigh on the AUD
• Wage growth remains low but does so in other advanced economies also
• RBA sees an uptick in the Australian economy over the coming year
• Declining mining investment and increase in non-mining investments, plus business conditions at a high level
• Little further growth expected in residential construction
• Slow growth in real wages and high levels of household debt are a concern and will likely constrain future spending, however retail sales are up recently
• Employment growth has been strong over recent months
• Unemployment expected to decline
• Low wage growth is expected to continue although stronger conditions in the labour market should see some lift in wage growth over time
• AUD appreciation has contributed to subdued price pressure and is weighing on the outlook for output and employment
• Low interest rates are continuing to support the economy

The above points of interest all signal business as usual, and no real indication of an interest rate rise as this would further slow economic growth. Further upside in this pair will in my opinion be due to continued USD weakness and general positive sentiment on the Australian economy.

In terms of price action, AUDUSD has been performing nicely of late, respecting long term support and resistance levels.

Price broke out of the consolidation channel that has held since 02/05/16 (or 05/02/16 if you’re ‘Murican) and recently retested the 0.78162 level before making a strong bullish move up to the latest highs.

All of our moving averages align on all timeframes and so I am ONLY looking to long this pair. I will be watching the 0.79850 area for pullbacks before looking for a reason to enter a trade.

Targets will be at the Monthly M4 and previous Daily/weekly structure level.

Aggressive Entry
Aggressive Entry

Daily
AUDUSD Daily

4 Hour
AUDUSD 4 Hour

1 Hour
AUDUSD 1 Hour

2 thoughts on “AUDUSD Outlook”

  1. Paul Mason says:

    Aggressive Entry

    [img src=”https://www.tradingview.com/x/n8cG4S05/” alt=”Aggressive Entry”]

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