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AUD/USD: technicals remain bearish ahead of RBA - Scotiabank

FXStreet (Córdoba) - AUD is quiet, consolidating around its 50 day MA (0.7132) with a limited response to conflicted PMI signals out of China (steady-neutral official, stronger than expected Caixin mfg). Considerable near-term risk lies with the RBA policy decision as market participants appear conflicted with regards to the outcome, said Eric Theoret, FX Strategist at Scotiabank.

Key Quotes

“Over 40% of Bloomberg forecast contributors (12/29) looking to a 25bps cut to 1.75%.
OIS are currently pricing in at least one 25 bps cut over the next year and a 25% chance of another (bottom chart)”.

“We see downside risk for AUD as policymakers consider last week’s disappointing inflation data and ongoing concerns surrounding China”.

“AUD technicals are bearish, with both momentum (RSI, MACD) and trend (DMI, short-term MA’s) biased to decline”.

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