AUD market caught short; cautious now ahead of RBA

The market did its usual think of getting bearish at the wrong levels and then being forced to run for cover. AUD/JPY re-took the technical pivot at 96.90 despite a falling USD/JPY, which shows just how badly positioned the FX market was. EUR/AUD also fell hard as a long-overdue retracement got underway and AUD/USD starred as it blitzed through heavy trailing stops above .9700.

Today’s big risk event is the RBA decision and whilst they are unlikely to cut again, I still think there is at least a 33% chance that they do. Recent soft data might sway them but the usually hawkish Stevens is more likely to be influenced by rising rates in the US; so ‘no change’ is still the likeliest outcome.

AUD/USD should be well supported now near .9700 and initial resistance comes in at .9840 ahead of the main technical target at .9930 (38.2% retracement of fall from 1.0580).


  1. Hello Sean, thanks for your input. Are u still sticking to ur target of 92 on aud//usd- and would u think of reshorting at 99. Also please give ur opinion on usd/chf. Great call last week on exiting.

  2. Thanks George. I still think the AUD will stay weak on the crosses in particular so I prefer to sell AUD/USD rallies as 92 cents still achievable imho. I’m not committing to any level just yet at which to sell, matter of wait and see. USD/CHF prob likely to drift lower as long as USD/JPY stays soft, but lot depends on what happens in EUR/CHF

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