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RBA Monetary Policy Meeting Minutes Preview

RBA Monetary Policy Meeting Minutes Preview

RBA Monetary Policy Meeting Minutes: While the Reserve Bank of Australia leaving rates unchanged really surprised nobody (well all but the two surveyed economists that enjoyed their time in the contrarian sunshine of course), a few key changes to the wording of the accompanying statement did give the Aussie markets a bit of a buzz.

The big one being the fact that the RBA dropped the line:

“Further depreciation seems both likely and necessary.”

As part of the art of interpreting central bank rhetoric, traders took this line as being an indication that the RBA was done with cutting rates. The fact that this lined up with the Fed looking more and more likely to move in September gave the theory more credit as Stevens knows that any USD driven move will be the trump card.

AUD/USD Weekly:

AUD/USD Weekly

AUD/USD 4 Hourly:

AUD/USD 4-H

With the bullish expectation in mind, you can see that AUD/USD has moved towards a confluence of major weekly support. Last week’s spike, which I have marked, shows sellers being unable to gain any traction below recent swing lows and confirms that there are buyers lurking in the major technical zone.

Any bullish comments in today’s Meeting Minutes could see this bottom confirmed.

On the Calendar Tuesday:

AUD: Monetary Policy Meeting Minutes GBP: CPI y/y USD: Building Permits

Chart of the Day:

“Light, sweet crude for September delivery fell 63 cents, or 1.5%, to $41.87 a barrel on the New York Mercantile Exchange, the lowest settlement since March 3, 2009.”

US Oil prices have continued to slide, with an accelerated drop coming this month as concerns over worldwide oversupply mounts.

Oil Daily:

Oil Daily

Oil 4 Hourly:

Oil 4-H

Taking a look at the CL-Oil contract on the Vantage FX MT4 platform and zooming into the 4 hourly chart, we can see that the last month has just been one way traffic with price respecting a tight bearish channel.

The fact that the channel is so tight like this, while inside the overall down trend shown on the daily, says that even if price breaks to the upside, we are most likely to see price consolidate in sideways trading at best. If you take this view then the risk is definitely greater if you’re long than short.

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