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.”
In 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 themselves gave the theory more credit as Stevens knows that any USD driven move will be the trump card.
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 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:
US Oil prices have continued to slide, with an accelerated drop coming this month as concerns over worldwide oversupply mounts.
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.
Dane Williams – @VantageFX
Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Vantage FX Pty Ltd, does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. The research contained in this report should not be construed as a solicitation to trade. All opinions, news, research, analyses, prices or other information is provided as general market commentary and marketing communication – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness and Vantage FX shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on the service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.