Forget the Melbourne Cup – Let’s Trade the AUD on RBA Day
Rowan Crosby • 1 min read
If you’re anywhere in Asia you probably know it’s the Melbourne Cup. Australia's richest and most famous horse race. While it’s labelled the “race that stops a nation”, for forex traders we are always on the lookout for opportunities.
Today is RBA and the expectation is, for now, change in official interest rates. In times gone by, whenever the RBA wanted to hike rates they liked to do it on Melbourne Cup day as punters were all down the race track (and generally drunk).
I can’t see that happening today, so here’s the plan we are working with for now…
I’m still very much bearish on the AUD and given the fact that the FOMC is preparing to hike in December, then I see no need to change that opinion in the short term. I’m selling spikes and I like the 0.7720 area to sell a pop. Should the RBA hike rates (incredibly unlikely) then clearly I would need to change that opinion. I think that any short-term volatility today might actually be a good opportunity to enter a longer-term position.