The Reserve Bank Australia’s meeting minutes revealed, well not that much. We already knew the bank decided to hold its official cash rate at 2.50%. And we know the position RBA governor Glenn Stevens and his colleagues have on AUD’s exchange rate – that its too high. While acknowledging that AUD has slid recently, RBA members still blame Aussie-strength in part for the slow economic recovery. In this environment, the AUD should be pressured, but we are seeing AUD/USD and AUD/JPY seeking to complete double bottoms.
After the RBA meeting minutes, the AUD/USD fell, but held above this week’s low, and is trying to form a double bottom. We might get some consolidation ahead of tomorrow’s FOMC, but it will be key to see whether this week’s low will hold after the key event risk. AUD/JPY is also forming a double bottom. This double bottom has a larger implication – respect of a previous consolidation high as support, which suggests AUD/JPY is ready for some bullish continuation, or at least a test of this year’s highs.
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