AUD: Australian Dollar continues to be corrected

The Australian Dollar rate continues to go down at the Forex currency market on Tuesday; sales started to rise following the decision made by the Reserve Bank of Australia to keep interest rate unchanged.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and is going up, giving a pair buy signal. Stochastic Oscillator tends to come out of the overbought zone starting a pair sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.1000 the pair will retest new highs at 1.1020. If the level of 1.0900 is exceeded, the level of 1.0850 will become the target of decline.

Therefore, the Reserve Bank of Australia decided to leave interest rate at the previous level of 4.75% per annum. At the same time the RBA was not eloquent in the comments – and this gave the go for investors to start sales.

It became known on Wednesday that CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.

Kevin Rood, Minister of Foreign Affairs of Australia said earlier that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued. 

As it was made public earlier, index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.

According to the data released today house prices in Australia reduced by 1.7% on quarterly basis in QI. Unemployment rate fell to 4.9% in March against preliminary level of 5.0% and employment rate increased to 37.8 thousand last month against the forecast of growth by 24 thousand. Therefore, strong performance in the employment sector helped the AUD to go up, convincing investors that monetary tightening process can resume earlier. In addition deficit of trade balance has been recorded in the country for the first time since spring 2010 (February -?$205 billion against +A$1.4 billion in January). In addition activity index in the service sector reduced to 46.5 points in March against the value of 48.7 points in February.

 

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