AUD: Sale of Australian Dollar has been suspended

At the Forex currency market the Australian Dollar rate almost stands still on Friday morning; sale of the currency has suspended when investors’ fears about slowdown in global economy have dissipated.

Forex forecast: MACD indicator for the pair AUD/USD goes down in the negative area after breaking through the signal line from top to bottom and is giving a sell signal. Stochastic Oscillator has come into oversold zone and started to rise giving a buy signal. 

Forex recommendations: in case of breakdown at the level of 1.0350, the pair will go to 1.0380 and 1.04101. If upward breakdown does not take place, the pair will consolidate at the current levels. Chances are high that aggressive sellers will be back in the pair.

Situation in the Australian economy has not changed significantly this morning.

It became known yesterday that consumer inflation expectations in Australia rose to 2.8% in September, as per estimates of Melbourne Institute against provisional estimate of 2.7%. This data is of general nature and the AUD did not respond to it; however it is obvious that inflationary pressure will continue to grow. The data released earlier showed that consumer confidence Westpac in Australia rose by 8.1% m/m in September, reaching the level of 96.9 points. Statistics released earlier showed that index of business conditions NAB in Australia fell by 3 points in August against the level of -1 point in July. The index declined to the lows since April 2009, indicating slump in the sentiments and prospects. National Australian Bank Ltd, noted commenting this outcome that it reflects increased level of uneasiness and concern that debt crisis will spread further.

At the meeting in the beginning of September, the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.75% per annum, as expected. In the follow-up comments the head of the RBA Glen Stevens noted that “medium term economic prospects look worse that it had been expected a few months earlier. Global financial markets demonstrated severe instability”. The situation with the rate seems logical amid such background.  “The RBA Committee decided that the most viable option will be to maintain current course of the monetary policy. At the next meeting the RBA will continue to carefully analyze both the prospects for economic growth and inflation in Australia, –said Stevens. If the RBA contemplates reduction of the rate from the current levels in response to the external background, interrupting a nine-month pause, it will become an indication for the AUD to continue its fall.

It became known earlier that trade balance in Australia was at the level of +A$1.83 billion in July against the forecast of +A$1.9 billion, which is slightly better than the data in June, however weaker than predicted. Obviously, external background puts pressure on the economy of the Green Continent.