G20: what did the leaders decide?
The G20 summit took place in Bali, Indonesia, on November 2022…
Rabobank forecast: AUD will fall further
Information is not investment advice
The aussie is expected to plummet for the next six months. What is the reason?
What happened?
AUD/USD has been dipping for 5 days in a row. That hasn’t happened since the coronavirus outbreak at the beginning of March. "We see scope for AUD/USD to pullback," claimed analysts from Rabobank. The Australian dollar has been rising for almost half a year, driven by the optimistic prospects on recovery and the steady rebound in Chinese economic activity.
However, investors’ enthusiasm has waned these days as new virus cases have started rising again and therefore the recovery will take more time than initially expected. Moreover, there are loads more factors except a risk-off sentiment that also weigh on the overall sentiment, undermining riskier currencies like the aussie. Among them are the uncertainty over the US presidential elections in November, the impasse of the US fiscal stimulus, and, of course, US-China tensions.
Elsewhere, the Reserve Bank of Australia is interested in depreciation of the national currency to boost exports. The RBA also mentioned that lower rates would "definitely be beneficial for the Australian economy". Those prospects by themselves have already pushed the aussie to the downside. Traders eagerly await the RBA statement on October 6 for more clarity.
Technical tips
AUD/USD has been plummeting since Friday. It has even broken down the six-month uptrend and also the significant support of 0.7150. Therefore, the way towards the next support of 0.7000 at the 100-day moving average is clear. If it manages to cross it, the pair may drop to the next support of 0.6920, which it failed to break in early July. Resistance levels are 0.7150 and 0.7200.
Similar
The End of Era: What Might the UK Face Next?
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
Why didn't oil prices calm despite OPEC+ attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Popular
Best Instruments to Trade This Week
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
European Currencies Ahead of the Banks' Statements
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
Will the FOMC Surprise the Markets?
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Choose your payment system
