Summary
The Reserve Bank of Australia meets today (May 2). The bank is expected to keep rates unchanged for the rest of 2017 with key areas such as the labor and housing markets closely monitored. Macro prudential measures have been recently utilized to deal with housing concerns with March’s labor report coming in stronger than expected. Through these macro prudential measures, the bank aims to ensure that the financial system resilience is directly proportional to the level of risk. Later we have the Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics, it captures business conditions in the manufacturing sector, and unemployment rate within the Euro Zone. Not much change is expected from the previous month.

EurAud Daily Chart

After having achieved an aggressive bull target at MR2 last month, price opened at MM3 1(.499) at the beginning of the month. Though the market is bullish, with an overbought stochastic I am expecting price to retrace down to 1.4300 to retest at the role reversal. Should price break that support level, the next key level of support is seen at MS1.

EurAud H4 Chart

Price opened at WM3 at the beginning of the month, which also coincided with MM3. Price broke through the 21 moving average signalling that the bullish momentum is now slowing down. With price currently at support, I will be looking for selling opportunities at the neckline of the double top formed.

EurAud H1 Chart

Price opened at a bull area zone (DPP-DM2). With the stochastic coming off an oversold are, for a much conservative entry I would like to see price retrace up between DM3 and DPP area, which also lies within the fib zone, to make a lower high for an entry. Keep in mind that there are some bears who would definitely sell off the 21 moving average.

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