AUDUSD Drops on RBA Announcement
Independent Analyst: Thibault Moirez
Date: 16 October 2020
The AUDUSD fell significantly on Thursday after the Reserve Bank of Australia Governor Lowe hinted at the possibility of a rate cut or a ramp up in bond buying. The news sparked a drop in Aussie bond yields which consequently weighed on the AUDUSD, the pair falling by 0.98 per cent at the time of writing.
The weakness in the Aussie Dollar comes despite the relatively decent employment figures released earlier in the day. The Australian unemployment rate came in below expectations at 6.9 per cent and the change in jobs didn’t drop as dramatically as predicted. That being said, the near-term prospects for the country remains bleak in light of the continued impact from covid-19 on its economy.
Meanwhile reports that Chinese importers have been delaying purchases of Australian coal is also factoring into the uncertainty felt in the Aussie Dollar. Trade tensions between Australia and its biggest commercial partner over its handling of the covid-19 pandemic will continue to weigh in the near term.
From a technical perspective, the main trend in the AUDUSD has tipped over into bearish territory on the daily chart. The pair is making a late attempt to stabilise around the 0.71 support level but may fall further into the 0.70 handle in the coming session with the RSI still flashing above oversold levels.
The 20-day EMA will be the target for bulls in the short term. The 0.71580 likely to be the pivot point should buyers find their way back into the market. A move above will resume the uptrend since late September. The viable trading range coming into the end of the week would be between the 0.715 and 0.705 levels.
(Chart Source: Tradingview 15.10.2020)
All the information mentioned above only represents the view of corresponding PT. Mentari Mulia Berjangka. The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. PT. Mentari Mulia Berjangka is not responsible for the content of any analysis, advice, comment, suggestion, research report or market data in this article and link to third-party resources.