The AUD is Looking Weak on a Soft RBA Minutes
We weren’t really expecting fireworks today upon the release of the RBA minutes, but the members appear to be a little doom and gloom at the moment.
The major takeaways appear to be that the RBA is in wait and see mode and will look to reassess where things sit at their February policy meeting. Of course, given the holidays, there is no official January meeting so that would be the next opportunity for the board to cut rates. As it stands there is some expectation that there will, in fact, be another 25 bp cut.
One of the key statements was that they will be waiting to look at the economy and more specifically jobs data. We get the monthly employment report on Thursday and that could really make or break for the AUD/USD. If you recall, last month was a bit of a disaster in terms of the headline number while at the same time, the jobless rate still can’t get anywhere near the 5.0% mark, which was the first target of the RBA.
From a charting perspective, I suggested yesterday, that the 0.6900 level would make for a good short. Sure enough, price hit that mark to the pip before falling away. There is some significant resistance in that area and also on the longer-term daily chart, that is right on the 200 SMA. Which is often one of the key indicators analysts use to measure trend.
So with that in mind, we could see a bit more downside for the Aussie ahead, at least until the Thursday jobs number is released.
A break below 0.6865 could be a nice little level that could even bring some more sellers and would make for a nice momentum short.
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