AUD/USD: supported & capped
AUD/USD recovered to $0.9650 from Friday’s low at $0.9578. However, Aussie remains capped by resistance around $0.9700. It was encouraged to get higher, but at the same time capped by mixed Chinese data. The pair remains below the bearish Ichimoku Cloud on H4. At the same time, AUD’s clearly oversold on the daily and weekly charts.
The Reserve Bank of Australia meets tomorrow at 04:30 GMT. According to NAB, “the market is 83% priced for no change.” Many experts think that the RBA will decide to evaluate the effects of it May rate cut to 2.75%.
Resistance is at $0.9670, $0.9700, $0.9750. Support is at $0.9600, $0.9550, $0.9530. A break below $0.9528 (low May 29) would expose $0.9488 (low Oct.5 2011).
Barclays thinks that the RBA rate decision on Tuesday could provide some short-lived support for the AUD. Yet, the bank recommends consider selling AUD/USD this week as the specialists expect the greenback to outperform as the market positions for Fed policy changes. HSBC shares this view. Bank of America Merrill Lynch expects some range trading in AUD/USD ahead of further decline.
Chart. H4 AUD/USD