Trading opportunities for currency pair: the RBA isn’t happy with the overpriced Australian dollar and, with the low price for iron ore, it could lead to a reduction in the rates. If rates are dropped, I’m waiting for a fall in the Aussie dollar to 1.0076/64. If the rate heads above 1.0633, it won’t fall further.
The Australian dollar has been in a downward trend since September 2014. During this time the trend has seen 4 bear impulses and 4 corrections. In the trading idea from 9th March, I looked at two targets: 1.0338 and 1.0064. The AUD/SGD rate has dropped to 1.0242, but before it fell, a false break in the trend was recorded.
I’ve decided to look at this pair again and expect it to fall with a final target of 1.0064. I reckon the market direction of the Australian dollar will be set on Tuesday, 5th May after the RBA has convened. Looking at forecasts, on Tuesday the central bank is expected to drop their rate by 0.25% to 2%.
The RBA is unhappy with the overpriced Australian dollar and, compounded by the low price of iron ore, the rate is likely to be dropped. Over the course of Thursday and Friday the AUD/SDG fell from 1.0633 to 1.0425. It’s likely that Monday’s rate will stay above the support. If the RBA drops the rate on 5th May, I’m waiting for the AUD/SDG to hit 1.0076/64 by the week’s end. Growth higher than 1.0633 will cancel out any further fall.
Why not take advantage of the improved version of the Trader’s Calculator.