Booking Profit in AUD/USD, After Taking a Dive on RBA Comments
The AUD/USD was quite bullish from March last year until recently. Although, it has lost its appeal since April, trading sideways for nearly two months. The situation in Australia doesn’t seem too good, with lockdowns continuing in Victoria, despite the low number of cases. This has been keeping the AUD in check, while the AUD/USD has been trading within a range.
The 100 SMA has turned into resistance on the H4 chart
The top of the range was at around 0.78, but in the last two weeks, the 100 SMA (green) has been acting as resistance. We opened a sell Forex signal below this moving average and it closed in profit overnight, after comments by the Reserve Bank of Australia, which suggested that wages will be stagnant for three years.
Remarks by RBA deputy governor, Guy Debelle
- Not expecting wage growth to be high enough until 2024
- Hoping for wage growth to hit +3% or more in 2024
- Will have to wait and see economic impact of lockdown in Victoria
- Short, sharp lockdowns have had limited economic impact so far
- Household sector sitting on a decent pile of savings, there is capacity to spend
Pretty much a repeat of what we heard from the RBA yesterday as they reaffirmed their more dovish stance to keep an easy policy through to 2024 at least – well beyond what the market expects the Fed to do (keep that in mind).
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