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18 May 2015
AUD/USD at session lows, RBA Lowe ref to rate weighs
FXStreet (Bali) - While AUD/USD price action saw a shift in order flow since the last North American session on Friday, suggesting that the correction lower from levels above 0.81 may be running out of steam, and that a resumption of the bull trend may soon be due, RBA Deputy Governor headlines, noting that there is still scope for lower rates in Australia, have pressed the rate to a daily low of 0.8016.
RBA Deputy Gov Lowe said that there is still scope to lower rates if needed, adding that the bank does not provide future guidance in months when it changes policy. COT still shows specs committing to new longs last week, which coupled with the decline in the last two days being an obvious withdraw of liquidity judging by the levels of volume observed (up/down tick counter), suggest that a fairly strong buying interest should remain at current levels, barring a clean break of 0.80.
Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes that the short term picture turned strongly bearish, as the 1 hour chart shows that the technical indicators turned lower after correcting up to their mid-lines, whilst the price is hovering around a bearish 20 SMA. In the 4 hours chart the price stands below its 20 SMA, whilst the Momentum indicator crossed its 100 level towards the downside and the RSI indicator also heads lower around 51, all of which support additional declines should the price break below 0.7990 the immediate support."
RBA Deputy Gov Lowe said that there is still scope to lower rates if needed, adding that the bank does not provide future guidance in months when it changes policy. COT still shows specs committing to new longs last week, which coupled with the decline in the last two days being an obvious withdraw of liquidity judging by the levels of volume observed (up/down tick counter), suggest that a fairly strong buying interest should remain at current levels, barring a clean break of 0.80.
Technically, Valeria Bednarik, Chief Analyst at FXStreet, notes that the short term picture turned strongly bearish, as the 1 hour chart shows that the technical indicators turned lower after correcting up to their mid-lines, whilst the price is hovering around a bearish 20 SMA. In the 4 hours chart the price stands below its 20 SMA, whilst the Momentum indicator crossed its 100 level towards the downside and the RSI indicator also heads lower around 51, all of which support additional declines should the price break below 0.7990 the immediate support."