Bullish wave structure persists for AUDUSD
It’s a quiet week for economic data in Australia, so attention is focused on yesterday’s minutes of the Reserve Bank of Australia meeting held on June 7. The statement following that meeting provided little forward guidance, and neither did the minutes.
It seems the RBA is awaiting the next inflation update on July 27, before deciding if any further policy easing is required. That suggests another non-committal statement at the July 5 meeting. Meanwhile market pricing suggests a rate cut is coming, perhaps on August 2 when the RBA will present its updated economic forecasts.
That leaves the Brexit result (due around 1200 hours local time on Friday) as the main risk, either way, for AUDUSD. However, with the Aussie dollars and Kiwi being similar beasts, perhaps those risks are asymmetrical (please see: Asymmetric risks for NZDUSD as Brexit vote looms).
Management and risk description
From an Elliott Wave perspective, the Aussie dollar retains its bullish wave structure and support now lies about the 0.7430 level and at 0.7400/0.7370, in preparation for the resumption of Aussie’s uptrend.
Once resistance at 0.7485/0.7510 is cleared, the Aussie will be positioned to advance onto the mid 0.7600’s, with potential to reach key 0.7836/0.7860 resistance (see daily chart).
Entry: Any dip to 0.7405/0.7390 today is seen as a buying opportunity
Stop: 0.7323, initially.
Time horizon: allow a few weeks for target to be met
AUDUSD daily chart (click to expand)
AUDUSD weekly chart (click to expand)
– Edited by Robert Ryan
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