AUDNZD: Awaiting the RBA's decisionThe Australian dollar might give back most of its recent gains against the U.S. if the Reserve Bank of Australia opts not to raise rates next week, given the groundswell of opinion backing a hike. Thirty-five out of 39 economists polled by Reuters expect the RBA to increase rates on Nov. 7, with only four predicting a hold. All of the “Big Four” Australian banks are in the majority forecasting a hike, including Westpac where newly-installed chief economist Luci Ellis was until recently assistant governor at the RBA. AUD/USD scaled a five-week peak of 0.6456 on Thursday, as the risk-sensitive AUD benefitted from global equity gains, hours after AUD/NZD notched a 19-week high of 1.0948.
If the RBA springs a dovish surprise and keeps rates unchanged on Tuesday, AUD/NZD pair could sag towards 1.0820 area. Australia’s central bank most recently raised rates in May (when 75% of economists polled by Reuters expected a hold).
With these in mind, we will follow a simple bearish setup and try to take a short position on a potential technical bounce with a stop loss above the previous top.
Trade with care
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