AUD: Australian Dollar has not determined movement direction yet

At the Forex currency market the Australian Dollar rate is going down slightly on Thursday morning after inert rise of yesterday: the currency has not received momentum to determine clear movement direction yet.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, and started to decline, giving a sell signal; however volumes are still low. Stochastic Oscillator is going up in the neutral zone, giving a buy signal.

Forex recommendations: off the market.Feasible event scenario at Forex: in case of breakdown at the level of 1.0740 the pair will go to 1.0750 and 1.0770.

If upward breakdown does not take place, the pair will consolidate close o the current levels.As it became known today, business confidence NAB in Australia amounted to +6 points in Q2 against the prior value of +11 points. At the same time index of current conditions rose by 3 points against preliminary +2 points and assessment of business conditions in the three-month term increased by 10 points (forecast had been the growth of 15 points).

According to the NAB estimates the gap between strong and weak sectors of Australia is reaching historic maximum and reminds of the situation in 2000 when slowdown occurred in the weak links of the economic chain.It is worth noting that business conditions index in Australia increased by 2 points in July, as per NAB estimates, against zero value in May. At the same time, business confidence index NAB amounted to 0 points against the level of +6 points in May, and GDP forecast for the fiscal year of 2011-2012 had been reduced to 1.7%.

The minutes of the meeting of the Reserve Bank of Australia in July which was made public earlier stated that the RBA needs time to evaluate dimension of the inflationary pressure and the next CPI report will determine the direction of the monetary policy. In addition, the minutes state that economic prospects are still positive in the medium term and as a whole, labor market does not demonstrate signs of recession. Thus, the RBA gave no indication as to when tightening of the monetary policy could commence.

At the last meeting two weeks ago, the Reserve Bank of Australia decided to leave interest rate at previous level of 4.75% per annum and according to the regulator, moderately restrictive monetary policy is consistent with the actual situation.  According to the RBA, the base rate will rise very gradually and economic growth in 2011 will be worse than expected. It became known yesterday that leading indicator in Australia fell by 0.3 points in June, to the level of 279.5 points, as per Westpac estimates. Market did not respond to the statistics, awaiting more serious external signals. 

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