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AUD/USD: rebound capped at $0.98

Australian dollar has rebounded to 0.9800 on Monday, but was capped at this level. The current picture remains bearish as last week AUD/USD closed below the 2011-2012 support trend line and the 200-week SMA. AUD net positions switched from long to short for the first time since June 2012. The next sell orders are seen at 0.9830 (Friday’s high) and 0.9850, while support lies at 0.9750 (50-month SMA), 0.9735 and 0.9700.

The key coming risk event for the markets will be the release of the RBA meeting minutes at 00:30 GMT. The release could shed the light on the prospects of further policy easing. According to UBS analysts, increase in rate cut expectations could cause the currency to weaken below $0.9000 what is consistent with underlying fair value. Barclays also recommends carefully watching the Chinese figures: “The Aussie is a lot easier to sell off than the Kiwi because of its more obvious correlation with China's economy”.

Chart. Daily AUD/USD

AUD
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