RBA Hawkish? Huh?

November 4, 2015

RBA Hawkish? Huh?:
Following the Reserve Bank of Australia’s decision to yesterday leave interest rates unchanged, the Aussie dollar doesn’t really know where it is at the moment. Hawkish, hawkish, hawkish. All I read is hawkish. But how is this line hawkish?

“Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”

Sure the RBA noted that conditions have firmed over the last few months and offshore improvements have helped to stabilise the Australian economy but I can’t help but look at trading the Aussie from the point of view of a fader.

The AUD/USD hourly chart in yesterday’s Daily Market Update had an hourly resistance zone in which we thought that sellers could potentially smash the Aussie down inside if we got there.

AUD/USD Hourly:
151104_audusd_hourly
Click on chart to see a larger view.

The hawkish perception got us there and the buying couldn’t be sustained, giving us multiple entries short if you were active throughout London.

With the horses and RBA behind us, attention now turns to the run in to Friday’s all important NFP release. Traders are cautious about the labour market data confirming any perceived hawkish bias from the Fed. Stay alert for ADP in the lead up tonight, possibly giving us a clue either way.

Enjoy your hump day!

———

On the Calendar Wednesday:
NZD Employment Change q/q
NZD Unemployment Rate
AUD Retail Sales m/m
AUD Trade Balance

EUR ECB President Draghi Speaks
GBP Services PMI

USD ADP Non-Farm Employment Change
CAD Trade Balance
USD Trade Balance
USD Fed Chair Yellen Testifies
USD ISM Non-Manufacturing PMI

———-

Chart of the Day:
Going to give some love to one of the lesser traded Commodities on the Vantage FX Market Watch: Palladium.

“Palladium is a chemical element with the symbol Pd and atomic number of 46. This metal was named after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena.”

XPD/USD Daily:
151104_xpdusd_daily
Click on chart to see a larger view.

The setup is just an overall bearish trend line with price flagging almost vertical back up to test the resistance level again. The fact that resistance lines up with the previously broken horizontal support level adds some confluence to the level. Keep your eye out for any short term resistance levels forming or slow down in price momentum and fading into it looks to be the play here.

The volume that goes through our Palladium book is minuscule in comparison to big brothers Gold and Silver but this post has me on a mission to find a successful trader with Palladium (or Platinum!) incorporated in their strategy. If you trade it yourself or know someone else that does, give @VantageFX a mention over on Twitter or leave a comment at the bottom of this post.

Do you see opportunity trading these alternative Commodities?

Dane Williams – @VantageFX

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