Into the RBA Minutes:
The big ticket item on the Asian Session calendar today is of course the release of the RBA Monetary Policy Meeting minutes from this month’s meeting.
The May meeting which of course saw Glenn Stevens and the RBA unable to ignore sluggish inflation numbers which dipped below one of the bank’s major mandates, keeping inflation inside the 2-3% target band.
With price already having been punished back down to the weekly support level that we spoke about yesterday, it will be interesting to see just how the Aussie reacts to any reiterated easing bias or comment around the strength of the currency.
The above hourly chart zooms in on the level, but you can see weekly trend line support holding. It’s certainly a level that’s hard to ignore!
Following the big CPI miss and subsequent cut off the back of it, we saw some commentary around how realistic or healthy setting the target band between 2-3% is. In today’s global environment of zero rates not even giving inflation a kick offshore, questions have been raised about the RBA possibly revising the target band down.
If you can’t score goals, why not just move the goal posts, right? What could possibly go wrong?
An argument for another day between economists with much more experience than me, but from a trader’s point of view, what the minutes have to say about the target band and the RBA’s tolerance toward it could be where the real juice can be squeezed for traders of the Aussie.
Bringing up a daily chart, I had some old trend lines left on my chart from a previous channel/flag pattern we had been watching.
With the bottom support level of the channel still there, price has today re-activated the level and the commodity has found some buying interest over the last couple of days.
On the Calendar Tuesday
AUD Monetary Policy Meeting Minutes
NZD Inflation Expectations q/q
GBP CPI y/y
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