The commodity currency drifts to Tuesday levels closed again below 20Dsma ignores rising commodities. Besides, rate cut bets are increasing tremendously pressures the AUD further.
Commonwealth Bank is the first of the big four banks to predict two more interest rate cuts by the RBA in 2016, with 1.25 per cent seen as the end point.
From The Australian:
Interest rate swap markets are pricing a 35 per cent probability that the Reserve Bank of Australia will cut interest rates in June, adding to the surprise cut announced at the start of May.
A 25-basis-point rate cut in June would take the cash rate to a record low 1.50 per cent from 1.75 per cent currently.
Sally Auld, chief economist at JP Morgan, Australia, said Thursday she now expects a 1.0 per cent cash rate before the middle of 2017. JPMorgan had previously been one of those forecasters saying the period of interest rate cuts was probably over.
The cross is trading at 0.7315 at early Asia session.
The support zone remains between 0.7300 and 0.7260 levels.
Selling on a rise favors the trend.
Resistance seems at 0.7335, 0.7370 and 0.7400 levels.
What’s on today?
U.S-Retail Sales m/m, Core Retail Sales m/m, PPI m/m and Prelim UoM Consumer Sentiment
Commerce Department report is expected to show that US retail sales probably increased in April for the first time this year, according to a Bloomberg survey.
Positive retail sales might push the cross towards 0.7260 and 0.7220 during the day.
Until the cross remains below 0.7425 sell on a rise favors the trend.
During a weekend, China Industrial Production y/y basis scheduled.