Following the September meeting of the Reserve Bank of Australia, the AUD/USD pair showed a fairly large-scale correction, rising by 150 points, from the bottom of the 67th figure to the middle of the 68th level. Although many analysts have already mentioned signs of a trend reversal, in my opinion, it is too early to draw such conclusions. The stars "converged" in favor of the Australian currency: the neutral position of the RBA coincided with a period of "thaw" in relations between the US and China.
Using a successful combination of fundamental factors, the bulls of the pair partially won back the positions lost in August. But in order to really talk about a turning point in the downward trend, buyers need to at least gain a foothold above the psychologically important mark of 0.7000. Bears for several months this year tried to break through this level of support from top to bottom. Now the situation has acquired a mirror character: the AUD/USD bulls need to overcome this target from the bottom up, which is already playing the role of resistance. But so far, buyers can't even get to the boundaries of this level - the last time the pair's bulls stormed the 0.7000 mark was at the end of July. However, the assault attempt was unsuccessful, after which the price declined for almost two weeks without a break. In other words, the downward trend is still in effect, although the latest correctional growth was somewhat surprising in its scope.
By and large, the correction of the aussie was completed at the beginning of last week. Since September 10, the pair has fluctuated within the 40-point band, showing signs of a protracted flat. The market is waiting for the information driver against the background of relative silence. The Australian dollar practically did not react to events in Saudi Arabia, and, accordingly, to the growth of the oil market. Last week's macroeconomic calendar for the AUD/USD pair was almost empty, and the quoted currency - the dollar - is waiting for the September Fed meeting, the results of which will be announced on Wednesday.
However, tomorrow's release may "stir up" the pair. We will find out the details of the last meeting of the Reserve Bank of Australia, which took place in early September. The minutes of this meeting will make it possible to understand what moods are in the RBA camp and what the Australian dollar should be prepared for.
In general, based on the results of the September meeting of the RBA, we can conclude that the regulator continues to gently prepare traders for the next round of interest rate cuts. Given the planned nature of this process, traders are gradually putting this fact into prices. The probability of easing monetary policy by the end of this year is more than 70%, especially if the negotiation process between Beijing and Washington ends in failure again. Representatives of the Australian central bank admit the likelihood of a rate reduction of 25 points, but "under certain conditions." According to the text of the accompanying statement, the RBA will only resort to lower interest rates "if necessary" - "to maintain sustainable economic growth". The minutes published tomorrow will make it possible to decipher the intentions of the regulator's members in more detail.
An extra reminder that the central bank is ready to follow the path of easing monetary policy will put pressure on the AUD/USD pair. Indeed, in the context of the above formulations, key macroeconomic releases now play a particularly important role, and recent data on the growth of the Australian economy have disappointed investors. Over the past four quarters, the volume of GDP has been declining - if in the first quarter of last year this indicator reached 3.2%, then in the first quarter of this year the indicator grew by only 1.8%. Last week, data for the second quarter of 2019 were published: unfortunately for the AUD/USD bulls, they came out at the forecast level: the key indicator continued its downward trend, dropping to around 1.4%.
The release was released after the September meeting of the RBA, so the minutes of this meeting will not reflect this fact. But the general rhetoric of this document will be considered through the prism of already published indicators, so the "cautiously dovish" attitude of the regulator will be interpreted against the Australian dollar.
In addition, the prospects for pulling down the AUD/USD pair are consistent with the technical picture. On the four-hour chart, the Ichimoku indicator generated the Dead Cross signal, in which the Tenkan-sen and Kijun-sen lines are above the price, and the Kumo cloud is below it. This signal indicates a likely change in the direction of the trend. In addition, the pair is testing the lower line of the Bollinger Bands indicator, which directly indicates the priority of the downward movement. If the price consolidates below this line (that is, below the 0.6850 mark), then the path will open to the next support level, which is located on the lower boundary of the Kumo cloud, corresponding to the 0.6780 mark.
