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RBA

Dovish Tapering Locks In QE (08 September 2021)The dovish tapering decision. During its monetary policy decision yesterday, the Reserve Bank of Australia (RBA) kept its cash rate unchanged at 0.10%. As promised, the central bank proceeded with its quantitative easing (QE) tapering plan announced back in the July’s meeting. What came as a surprise is the duration of the new round of QE. Previously, the RBA opted for a two-month QE duration. But during the announcement yesterday, the central bank decided to extend the duration by five months instead. Thus, the tapered A$4 billion QE will run from September until at least February 2022. As a result, the Australian dollar strengthened for a brief period of time before weakening across the board, reflecting the dovishness as a result of the extension of the QE duration. Delta variant still a concern to the RBA. Despite RBA Governor Lowe saying previously that fiscal policy will prove to be more effective than monetary policy in providing aid at the moment, this does not deter the central bank from making a more cautious decision. As explained in the rate statement, the RBA’s decision to extend the QE duration “reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak”. Rate hike remains out of sight. As with the previous meetings, the RBA continues to reiterate that its cash rate will not be increased until inflation falls within the 2-3% target range and this condition will not be met before 2024 based on their current projection.
by GH_Lee
RBA to Catalyse a New Correction on AUDUSD At its monetary policy meeting from earlier today, the RBA observed worsening growth prospects in Australia due to the Delta variant. These muted forecasts for Q3 are likely to prompt a correction on AUDUSD's uptrend. The uptrend continues to be active, as underpinned by the ADX indicator, which has been threading above the 25-point threshold for quite a while. However, the crossover on the MACD implies the resurgence of bearish momentum in the short term. Meanwhile, the emergence of a Hanging Man candle from the upper limit of the ascending channel means that the correction may have already started. The price action is likely to drop to either the 23.6 per cent Fibonacci retracement level at 0.73907 or the 38.2 per cent Fibonacci at 0.73364 before bulls can regain control.
Short
by Trendsharks
Aussie rally pauses ahead of RBAThe Australian dollar is in negative territory on Monday, after flexing some muscle last week. AUD/USD is trading at 0.7430, down 0.35% on the day. The currency shot up 1.94% last week, as investor appetite for risk improved, which was bullish for minor currencies like the Australian dollar. The Australian dollar ended the week on a high note, with strong gains of 0.75%. This was in response to a shocker from US nonfarm payrolls on Friday, which added just 235 thousand jobs. The consensus was around 750 thousand jobs and some analysts were even calling for a print north of the 1 million mark. The soft NFP reading effectively put on hold any expectations that the Federal Reserve would signal tapering at its policy meeting later this month, and that has weighed on the US dollar. The Aussie has reversed directions on Monday, but I would not read too much into that, as US markets are closed for Labour Day, and liquidity is thin, which could account for the US dollar bouncing back on Monday after a poor showing last week. The RBA holds a policy meeting on Tuesday, and the markets will be keeping a close eye on what the central bank decides with regard to a planned taper. At the August meeting, policy makers adhered to plans to taper weekly bond purchases from AUD 5 billion to AUD 4 billion. Since then, the economy has taken a hit from prolonged lockdowns due to the Delta variant of Covid-19, and GDP in the third quarter may have contracted by as much as 3%. The big question is will the RBA feel that a taper is warranted, given that economic conditions are not all that favorable. If the central bank says that it will begin a taper next month, the Australian dollar could respond with strong gains.
by OANDA
1
AUD Versus NZD: A Fundamental Outlook and TradeFundamentals: It has been a hawkish month for the Reserve Bank of Australia. The recent meeting suggests that their guidance ramps up into a more hawkish tone. Both monetary and fiscal policies are aussie positive, so far. One thing I keep in mind is their fiscal policy in response to the current covid-19 lockdowns. I believe that the Reserve Bank of New Zealand is overly hawkish, given their currency price. For the next few weeks, the AUD currency give us a more underdog positioning to exploit versus the NZD currency. Technicals: (1) Monthly support (2) 61.8% fib (3) Oversold indicators (4) Divergence (5) RSI at extreme levels Daily: Weekly:
Long
by Rocketman
AUDUSD - Short Below Key ResistanceAUDUSD has consolidated below at 0.748 and we expect below this resistance level the currency pair to move lower toward the psychological 0.7 level. Non farm payrolls came in at 943K vs 870K forecast boosting the US dollar as Australia continues to be impacted by the covid delta variant. Additionally, treasury yields have risen on the back of the strong payroll number as the markets expects the FED to taper sooner. Next week we await key economic data releases including US retail sales as well as RBA meeting minutes and FOMC meeting minutes for any significant price action.
Short
by KQMarkets
'Giant Panda' leaving a miasmaFurther downside possible, but looks short-lived while above 200MA and importantly 0.703x. A lot of noise from the region, with PBOC lifting the bid temporarily and clearing the way for the test of 0.703x. This is an important area structurally as those with a background in waves are tracking for the beginning of an impulsive wave 3 inside a major. Here looking to add bullish exposure between 0.723x and 0.703x, expecting 200MA to hold but a sharp spike is still open via inflation today...the cheaper the better if you ask me. Confidence in the view will increase above the (a) at 0.753x and indicate a strong base is forming. As always, start counter trend positions as a hedge, and then when it really starts working, swing for the home run.
Long
by ridethepig
7
QE Tapering Plan Will Go On (06 August 2021)Three days ago, the Reserve Bank of Australia (RBA) delivered a little surprise when it decided to stick with its quantitative easing (QE) plan announced back in July despite the recent spike in COVID cases in Australia. (Refer to my post "RBA Sticks With QE Tapering Plan (04 August 2021)" on RBA monetary policy) Details on why the central bank decides to proceed with its decision on QE tapering were provided during Governor Lowe testimony earlier today. Lowe’s Testimony During his testimony before the House of Representatives Standing Committee on Economics, Governor Lowe said that the RBA has considered holding back its plan for QE tapering during the monetary policy meeting. However, the central bank’s positive projections on the economic growth for 2022 permitted the plan to continue. Lowe explained that “any additional bond purchases would have their maximum effect at that time and only a very small effect right now when the extra support is needed most.” Furthermore, he mentioned the RBA felt that fiscal policy would be more appropriate than monetary policy in terms of providing aid at the moment. Nonetheless, the flexible approach of its QE programme allows the central bank to make adjustments to the rate of bond purchases in response to any unexpected turn of events. On the subject of the RBA cash rate, Lowe highlighted that the central bank will not be increasing cash rate until inflation is sustainably in the 2-3% range. He emphasised that the RBA needs to be confident that inflation will remain within the targeted range before any rate hike is considered. Finally, Lowe said that the condition for a rate hike “is not expected to be met before 2024”. RBA economic projections. For year 2021, Australian GDP: 4.00 (4.75) CPI Inflation: 2.50 (1.75) Unemployment Rate: 5.00 (5.00) For year 2022, Australian GDP: 4.25 (3.50) CPI Inflation: 1.75 (1.50) Unemployment Rate: 4.25 (4.50) For year 2023, Australian GDP: 2.50 (N/A) CPI Inflation: 2.25 (N/A) Unemployment Rate: 4.00 (N/A) *Figures shown in parentheses refers to projections from May 2021
by GH_Lee
RBA Sticks With QE Tapering Plan (04 August 2021)The RBA’s decision. During their monetary policy meeting yesterday, the Reserve Bank of Australia (RBA) kept its monetary policy unchanged, holding interest rate at 0.10% and quantitative easing (QE) at a rate of A$5 billion per week. A little surprise. With the recent spike in COVID cases in Australia due to the highly contagious Delta variant, the market was anticipating the RBA to announce the holding back of their QE tapering plan that was made during the previous meeting. However, the central bank stuck to its tapering plan of A$4 billion per week that will run from early September to at least mid-November. RBA downplayed impact of virus outbreaks on economic recovery. Although the RBA decided to stick with its QE tapering plan, it did acknowledge that the recent virus outbreaks are “interrupting the recovery and GDP is expected to decline in the September quarter”. Nonetheless, the central bank is confident that the Australian economy will rebound quickly after getting hit by the outbreaks as justified by previous occurrences. Impact on the Australian dollar. The Australian dollar strengthened as a result of the RBA sticking with their QE tapering plan.
by GH_Lee
AUDUSD bulls attack monthly hurdle on hawkish RBAThe Reserve Bank of Australia’s (RBA) keeping of September tapering on the table, despite covid woes at home, offered over 40 pips of immediate upside to the AUD/USD pair on the announcement. However, the quote remained below a one-month-old horizontal hurdle surrounding 0.7400–7410 and seems to ease of late. Although firmer RSI and RBA’s hawkish title favor AUD/USD bulls to cross the 0.7410 hurdle, 200-SMA near 0.7455-60 adds to the upside barriers before directing the quote to the mid-July top near the 0.7500 round figure. In a case where the quote steps back from the stated resistance, as it did the last Thursday, 0.7350 may return to the charts. However, any further weakness of the pair will be challenged by a two-week-old rising support line near 0.7330. If at all the AUD/USD bears dominate past 0.7330, the yearly bottom surrounding 0.7290 will be the key before direct the quote towards the October 2020 tops surrounding 0.7245.
Short
by MTradingGlobal
AUDUSD again crosses seven-week-old hurdle on RBA movesDespite pouring cold water on the face of monetary policy adjustment hopes, the Reserve Bank of Australia (RBA) manages to keep AUDUSD at the front of the G10 gainers. The Aussie central bank refrained from widely teased yields targets while also signaling a plan for further bond purchases during Tuesday’s monetary policy meeting. However, downbeat US dollar and hawkish comments from Governor Philip Lowe back another move beyond the falling trend line resistance, previous support, from mid-May after failing to stay beyond the same during late June’s upswing. Given the bullish MACD and RSI recovery, not to forget the 200-DMA breakout, buyers are likely to overcome the June 25 top surrounding 0.7615 during the latest run-up. Though, early June lows near 0.7645 will test the AUDUSD bulls afterward. Meanwhile, failures to stay past 0.7570 confluence comprising 200-day SMA and the stated trend line, will recall the AUDUSD sellers targeting the 0.7500 round figure. However, bears will again be questioned by a falling trend line from early February, near 0.7475, during any further weakness past 0.7500. It should be observed that the pair’s bearish trend remains in play despite the latest recovery moves.
Long
by MTradingGlobal
RBA where are YOU?So far the sudden creep up in the Australian 3 year yield has gone unnoticed. But it has jumped massively in the last two weeks from ​0.07% to 0.26% For months the RBA has kept the rate under 0.10%. However, this time it has left the rate unchecked. According to Michael West, this is the RBA testing the market. The three year rate is the rate that Banks use to lend to home owners and this is about taking the heat out of the property in an election year. www.michaelwest.com.au However, in it's just published minutes (1 June) the bank has confirmed its decision of " a target of around 0.1 per cent for the yield on the 3-year Australian Government bond" So is this a shorting opp? With the rates about to get squashed. Let's see.
TVC:AU03Y
by majicktrader
3
Aussie starts week higher, RBA decision nextThe Australian dollar is in positive territory on Monday. In the European session, AUD/USD is trading at 0.7733, up 0.32% on the day. The week started out on a sour note, as inflation fell in May. The Melbourne Institute (MI) Inflation Gauge, a monthly release, fell 0.2% in May, marking its first decline in seven months. With major economies showing stronger growth in the post-Covid era, central bank officials are keeping a close eye on inflation, as higher inflation could prod the central banks to tighten policy sooner rather than later. The MI release is just one reading, but if upcoming inflation data shows that inflation is not moving higher, then the RBA will not be under pressure to scale back its QE program. A taper by the RBA (or even a hint of a taper) would be bullish for the Australian dollar. The RBA holds its monthly policy meeting on Tuesday (1:30 GMT). The bank is expected to maintain policy settings and keep interest rates at a record low of 0.10%. The economy is performing well, but the recent outbreak of Covid in Melbourne and subsequent lockdown is a reminder that Covid has not yet been defeated. At the same time, economies are reopening as Covid recedes, and some central banks have become more hawkish in response. The Bank of Canada recently tapered its QE programme, and the Reserve Bank of New Zealand surprised the markets last week when it signalled the potential of a rate hike in the second half of 2022. The RBA has remained in dovish mode, stating that it has no plans to raise rates prior to 2024. Still, the RBA acknowledged the strong Australian recovery in its quarterly update earlier in May, and if the economic data continues to point upward, the bank may have to change its timeline for a rate change. Meanwhile, the bank's commitment to remain dovish has kept the Aussie from rising. AUD/USD is putting pressure on resistance at 0.7777. Above, there is resistance at 0.7846. On the downside, there are support levels at 0.7658 and 0.7608
by OANDA
Aussie slides on soft consumer confidenceThe Australian dollar has reversed directions on Wednesday and recorded considerable losses. In the European session, AUD/USD is trading at 0.7750, down 0.52% on the day. Investors gave the Aussie a thumbs down on Wednesday after Westpac Consumer Sentiment fell 4.8% in May. The trend of improving consumer confidence over the past three months was broken. Still, a review of the Westpac report shows a "glass half full" approach, as the report notes that the index dropped from 118.8 to 113.1, its second-highest print since April 2010. The RBA will hold a policy meeting on June 1, and the central bank will announce its plans for Yield Curve Control (YCC) and QE. The Westpac report says that the bank remains committed to monetary stimulus and this means that QE will be extended for a further A$100 billion in September, and YCC policy will shift from April 2024 to November 2o24. The bank has repeatedly said that it has no plans to tighten policy prior to 2024. The market will be treated to a dump of Australian data on Thursday. Consumer Inflation Expectations is first up (1:00 GMT), with a consensus of 3.6%, up from 3.2%. This indicator is closely watched as inflation expectations can translate into actual inflation, so a strong gain would be a signal that inflationary pressures are growing. The highlight will be Employment Change (1:30 GMT), with a small gain of 15.0 thousand expected, down from 70.7 thousand. Australia also releases Manufacturing and Services PMIs (23:00 PMI). Both sectors are in good shape, a testament to the strong Australian economy. Manufacturing PMI is projected at 59.8 and Services at 58.9, which are well into expansionary territory. The 50-level separates contraction from expansion. AUD/USD faces resistance at 0.7887 and 0.7990. On the downside, there are support levels at 0.7684 and 0.7584.
by OANDA
AUDUSD: Weekly ForecastThe Aussie will be highly watched this week as RBA releases its monetary policy as well as employment data. AUDUSD was somewhat bearish last week as it fell but found support and recovered half of the loss. The rebound came from multiple technical support such as the bottom of a rising channel as well as moving averages. Otherwise, AUDUSD is technically a bullish pair for more than a year now and climbing very much like the US stock indices. That's mostly contributed by rising inflation which causes commodity prices to go up and Aussie, as most should already know, is a commodity currency. While we can continue to look for buying opportunities near the support, the upside is limited as the market is about to reach the equilibrium level slightly above 0.80. Price of interest: Resistance: 0.7890, 0.8080 (equilibrium) Support: 0.7730 (bottom of channel), 0.7690 (equilibrium)
Long
by AlgoVenture
13
AUD - FUNDAMENTAL DRIVERSFUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, AUD has benefited from the market's improving risk outlook over recent months as participants moved out of safe-havens and into riskier, higher-yielding assets. Also, as a pro-cyclical currency, the AUD enjoyed upside alongside other cyclical assets after moving into an early post-recession recovery phase with expectations of global synchronized recovery. Even though the risks remain surrounding the virus and thus global economic outlook, the success of the global vaccination roll out should prove supportive for the AUD. 2. The Monetary Policy outlook for the RBA The RBA continues to rule out NIRP, and with the Cash Rate at a record low of 0.10%, further reductions appear unlikely. Further easing remains a possibility through QE and the bank has stressed its commitment to purchase as many bonds as necessary to reach and maintain their 3-year yield curve control target of 0.10%. The possibility of macroprudential policies to try and curb a very hot housing market is a possible risk. 3. The country’s economic and health developments Australia’s successful handling of the pandemic is one of the reasons why the economy was able to see a stronger economic recovery than initially expected. On the economic front, China’s recovery remains robust, and as Australia’s biggest export destination (39.1% of total exports) their demand for Australian commodities has seen a surge in commodity prices, especially Iron (Australia’s biggest commodity export). If the virus remains under control, and China’s recovery and demand for commodities remains strong the outlook for the domestic economy remains positive.
by thunderpips
AUDCAD Possible Short SetupAUDCAD is resting in the previous support zone of 0.9518-0.9536. After breaking quickly through this zone by slightly over 60 pips, price slowly made its way back. The 4H chart shows a downward bias as the 20, 50, and 200 period MAs are crossing down. Furthermore, price is resting right at 20 period MA, a great place for a potential reversal downward. I was hoping for a super clean retest here where price bounces off the 50 period or 200 period MA right at my retest zone. However, it doesn't look like we're getting that. As such, I will be taking this trade with a 1% risk instead of my normal 2%. I will personally wait to enter this trade until I see a clear bearish reversal pattern on the 1H chart or some lower lows and lower highs on the 15m. Furthermore, the RBA will be releasing their Rate Statement and Chast Rate tonight at 12:30am Eastern. That makes this a risky entry. However, it is epxected that the cash rate will remain the same through 2023 or so. They may make some changes to QE and curve control, among other things. Ideally, we can get a clean entry before the RBA data is released. Patience is the name of the game, so I will be watching this pair for a solid entry.
Short
by MRobertsTrading
USD leads FX majors while AUD trades mixed following RBAHeading into today's european trading session, the risk tone is leaning risk-on with asia pacific indices positive, yields firmer, measures of volatility subdued and safe-havens weaker. In the FX complex,the positive risk tone sees CHF fall to the bottom of the pack, with JPY also pressured across the board. Consequently, EURCHF has reclaimed the 1.1000 handle as USDCHF looks for a test of yestrday's high. Indeed, USD remains well supported across the board, leading the FX majors to the upside with DXY trading back above the 91.00 handle and looking to pare all of yesterday's weakness. Commenting on USD, Reuters noted: "The dollar drifted higher in the Asia session on Tuesday, pausing a monthlong decline as investors weigh whether a roaring U.S. economic recovery may force interest rates higher and are looking to upcoming economic data and policy speeches for clues." Another currency of note is AUD following the RBA's May policy announcement. As expected, monetary policy remained unchanged with the cash rate and 3yr yield target at 0.10%. The response from analysts has been mixed, with the focus failing on sharp revisions higher to the central bank's economic forecasts, but still no policy tightening expected until at least 2024. Consequently, AUD trades mixed against its major peers. Looking to the sessions ahead, the only data of note in today's european trading session will be the UK's manufacturing PMI report which is expected to be confirmed at a healthy 60.7.
TVC:DXY
by thunderpips
2
Aussie steadies after slide, RBA nextThe Australian dollar is steady in the Monday session. In European trade, AUD/USD is trading at 0.7722, up 0.14%. The US dollar showed some broad strength on Friday, and AUD/USD fell 0.70% and briefly fell below the 0.77 level. The greenback was supported by inflows from international investors who snapped up US Treasuries in month-end rebalancing flows. Strong US numbers on Friday also gave the US dollar a boost. The Core PCE Price Index, which is considered the Federal Reserve's preferred inflation gauge, rose to 0.4% in March, up from 0.1% beforehand. This is another indication of inflationary pressures, as the US economy continues to sprint at a fast pace. The Fed has stated more than once that any spike in inflation will be temporary, but it's not at all clear that the market has bought into this stance. If inflation numbers continue to rise in the coming months, the Fed may have to acknowledge that higher inflation levels are not a passing event. On Friday, Fed Governor Robert Kaplan, who is not a voting member, said straight out the Fed needs to be talking about tapering its asset-purchase program. The Fed has insisted that it needs to keep its foot to the pedal as the economy continues to recover, but there's a good chance that other Fed members agree with Kaplan. The US economy has been reeling off impressive numbers, and the April nonfarm payroll report is expected in at 975 thousand. A print above the one million mark is certainly achievable and would provide ammunition to the view that the Fed should review its current policy. The RBA is facing a similar economic picture to that of the Fed - a rapidly improving economy and strong growth. Like the Fed, the RBA has implemented a highly accommodative policy in order to support the economy's recovery from the Covid pandemic. The central bank holds its policy meeting on Tuesday (4:30 GMT), and the bank is expected to maintain interest rates at 0.10% and its QE programme of A$100 billion. Unless there is a surprise announcement, I would expect the RBA meeting to be a non-event for the Australian dollar. On the upside, 0.7787 is the next resistance line. Above, there is resistance at 0.7864. On the downside, there are support levels at 0.7665 and 0.7620
by OANDA