AUD: Australian Dollar continues to tend upward

At the Forex currency market the Australian Dollar rate continues the growth which started earlier, ignoring external background so far as well as possible aggravation in the Far East and in Egypt.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD; however it is moving along the signal line and does not form a clear signal. Stochastic Oscillator has reversed today, giving grounds for a pair sell signal.

Forex recommendations: off the market

Feasible event scenario at Forex: in case of breakdown at the level of 1.0000 the pair will go to 1.0050 and 1.0090/1.01000. If a breakdown of the parity level will not take place, the pair will continue to consolidate close to the current levels.

The meeting of the Reserve Bank of Australia will be held tomorrow, regulator’s comments will be the focus of traders’ attention, as players await RBA’s assessment of the damages in the country caused by the flooding, one the largest over 50 years. At the same time interest rate is most likely to be remain unchanged, at the current level of 4.75% per annum.

Market believes that there are plenty of reasons owing to which it is better to the regulator not to raise interest rate, and inflation is not the most compelling of them. Inflation rates are expected to rise as the flooding has brought losses to the farmers and their farms in the average amount of A$1 billion.

According to preliminary estimates damage from the natural disaster in January amounts to A$20 billion. Market thinks that after a pause the rate will be raised to the level of 5.0% before the end of QII 2011.

In advance of tomorrow’s meeting of the regulator, volatility for the pair AUD/USD can increase.
 

[More]