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AUD And NZD Suffer On Dovish RBA Rate Decision

AUD And NZD Suffer On Dovish RBA Rate Decision

There is still no Brexit deal in the UK Parliament. As mentioned in our previous analysis, the pound does not care too much about this. On Friday we had movements in both directions, on Monday we saw rises and today we can see a drop. Clearly, another rejection does not play a big role here. Let’s look for trading occasions elsewhere. Overnight and early in the morning we had a rate decision and the statement from the RBA. Rates remained unchanged but the statement was dovish. This was a bearish trigger for the currencies from antipodes: AUD and NZD.

The first instrument in our analysis will be AUD/USD. The pair is aiming to test the crucial horizontal support on the 0.707. For the past two weeks, that area was proven as an important stronghold for the buyers. If the price will manage to break this support, we will receive a strong sell signal. As long as we are above, buyers can still feel relatively safe.

Correlation between the AUD and NZD is obvious so the Kiwi is also going down. The best setup can be spotted on the NZD/CAD, where we do have a bearish engulfing on the weekly chart along with the false breakout above the down trendline. The sell signal is pretty strong here, at least from the technical point of view.

The last instrument is the EUR/USD, where we can clearly see the power of the false breakout pattern. Recently we had two of them and both of them brought us nice, directional movements. Today, EUR/USD is making new mid-term lows and it looks like sellers are going to win this one and in the next few days, the price should continue this decline.

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