The AUD Starts the Week Strong Ahead of the RBA
Rowan Crosby • 1 min read
The AUD/USD has started the week in the green ahead of a number of important data points and of course the RBA.
If you recall, the November meeting was the one that saw rates fall to that record low level of 0.1% and also the addition of QE. After so much action at that meeting, it is highly unlikely that we’ll be seeing anything much happen at all from Governor Lowe. He is also scheduled to speak the following day.
Interestingly, we are also going to be looking at the latest GDP number as well this week, which is going to likely show that the economy is bouncing back very quickly – with many calling it a ‘v-shaped’ recovery. A recession is considered two periods of negative economic growth, however, the next quarter is looking like it is jumping to the positive at 2.5% which is really very good.
The recovery continues to be lead by improving jobs across the board as well as strong commodity prices including record high iron ore prices as China remains strong as well.
At the same time, we are also seeing that play out on the charts of the AUD/USD as price looks to make a run at the recent highs. The Aussie is really knocking on the door right of 0.7400 right now and that is likely to be the real focus for this week.
Given that the US continues to be in serious political trouble, the USD will remain soft going forward, and that will continue to prop up the AUD/USD and other key risk assets.
The trade this week will likely be a long signal on a break and hold of the 0.7400 level and with plenty of news and big data points this week, it should be a very interesting one for traders.