12:30am (NY Time) AU RBA Rate Decision Forecast 3.00% Previous 3.00%
ACTION: AUD/USD N/A
Reserve Bank of Australia (RBA) is likely to keep its official cash rate unchanged at 3.00% as expected by the majority economists surveyed by both Bloomberg and Reuters. As a matter of fact, due to the recent optimism in the market and signs of early recovery, the next logical move for RBA in its rate policy is likely to be hiking rates rather than cutting rates.
As RBA is accustomed to release a statement along with the rate decision, and the market may react with heavy volatility if this statement is biased toward recovery or prolonged recession. Prior to the rate decision market has been trading AUD/USD at top of its trading range since the end of July 09, therefore a possible reversal may take place if the statement is dovish.
I’ll be looking at this release and possible look for areas to sell AUD/USD from the top since AUD has been on top of the range in addition to the exaggerated demand as a result of risk appetite sentiment. AUD/USD is probably overvalued compared to the current rate of recovery, therefore we could see some common sense come into play soon, especially with this pair.
[flv:http://www.newsprofiteer.com/090109-rbarate/090109-rbarate.mp4 480 360]
UPDATE: RBA decided to keep rates unchanged and was optimistic over the future, however my initial analysis was correct on the profit taking and correction. Even though I decided to take a small loss on this trade of 3 pips, market eventually moved in the direction of my trade, had I held on to the trade, I would have made over 50+ pips, but since we’ve got many other news coming out, it was best to stay out of the market. Overall analysis was correct, therefore take a moment and listen to it if you’ve got the time.
Related posts:
- RBA Cash Rate Decision 11/30/09 (Interest Rate Decision)
- Trade Plan For RBA Interest Rate Decision 09/07/10
- Forex News Trading AU RBA Interest Rate Decision 01/31/11
- Forex News Trading Australia RBA Interest Rate Decision 12/06/10
- Forex Strategy For AU RBA Interest Rate Decision 08/01/11
- Forex Trading Strategy on RBA Interest Rate Decision 10/04/10
- Forex news trading for AU RBA Interest Rate 02/28/11
- Forex News Trading AU RBA Interest Rate 04/05/11
- Forex News Trading For RBA Interest Rate Decision – 11/01/10
- Forex News Trading AU RBA Interest Rate 06/07/11
{ 1 comment… read it below or add one }
Hi Henry,
I didn’t trade this one but I was very surprised with your entry as you jumped straight in on a very fast sell off. I really thought you would have at least waited for a retracement before getting in on this trade?
Cheers Devin