Australian dollar traders are bracing for more moves in the currency in the sessions ahead with the Reserve Bank of Australia’s rate call tomorrow coming amid substantial market volatility. The Reserve Bank is set to be one of the last cabs off the rank in terms of entering an easing cycle with the market currently pricing the first cut to come in December.
Some investors had feared that the next move from the central bank would be a hike with Core inflation is still sitting at 3.9%, well above the RBA’s target level, however surprise lower print last week has pushed down that expectation, and most are now looking for a ‘hawkish hold’ tomorrow as the board looks to keep its options open moving forward. The risk will sit with anything more dovish from the board and given recent moves over the last few days in global markets there is a slight chance that this situation is acknowledged as the Aussie usually comes under pressure when risk is hit as we have witnessed in the last few trading sessions. Traders are now expecting to see strong trading opportunities on the back of the RBA announcement both against the dollar and on the crosses.
The Aussie is currently trading to the lower end of its recent range as global growth concerns continue to weigh on the currency and a more dovish call from the bank could see it break the recent low at 0.6350 and target the 2023 low at 0.6264. Conversely a stoically hawkish hold would lead to a rally back into recent ranges.
Resistance 2: 0.6775 – Trendline Resistance
Resistance 1: 0.6593 – 200-Day Moving Average
Support 1: 0.6346 – Trendline Support and recent low
Support 2: 0.6264 – 2023 Low
