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3 May 2013
Forex: Aussie edging higher during Asia trade, resistance at 1.0290 in focus
FXstreet.com (Barcelona) -The Aussie is drifting higher during Asia trade, up 23 pips at 1.0268. Economic data in the session has been quiet, with the AUD PPI Index coming in at 0.3% actual vs. 0.2% estimate. Also, China Non-Manufacturing PMI was released (although China is on holiday), and came in at 54.5 actual vs. 55.6 previous. Market participants are already focusing on RBA Interest Rate decision due out on Tuesday May 7th at 4:30GMT.
According to Mike Jones, Currency Strategist at BNZ, “While we do believe incoming Australian economic data – relating to the housing sector in particular - justifies additional easing, we are not convinced the RBA will yet see things the same way, having throttled back on its easing bias just four weeks ago. The Aussie OIS curve is pricing around a 50% chance of a 25bps cut next week. So an unchanged decision would see the AUD rally.”
The short term moving average set up remains bearish, with price below both the downward sloping 9 and 20dma’s. The RSI (14) continues to be in neutral set up, again holding the 40 level. It will be important to focus on the initial resistance level near 1.0290 (this is the downward sloping 9dma), followed by 1.0330 (previous support, now resistance on 1 hour chart). First support sits at 1.0258 (the 9dma on 1 hour chart), followed by1.0222 (previous day low).
According to Mike Jones, Currency Strategist at BNZ, “While we do believe incoming Australian economic data – relating to the housing sector in particular - justifies additional easing, we are not convinced the RBA will yet see things the same way, having throttled back on its easing bias just four weeks ago. The Aussie OIS curve is pricing around a 50% chance of a 25bps cut next week. So an unchanged decision would see the AUD rally.”
The short term moving average set up remains bearish, with price below both the downward sloping 9 and 20dma’s. The RSI (14) continues to be in neutral set up, again holding the 40 level. It will be important to focus on the initial resistance level near 1.0290 (this is the downward sloping 9dma), followed by 1.0330 (previous support, now resistance on 1 hour chart). First support sits at 1.0258 (the 9dma on 1 hour chart), followed by1.0222 (previous day low).