On Tuesday, the RBA released its monetary policy statement and Australian Officials decided to keep their cash rate steady at 2.5%. It seems that the central bank switched to a more ‘neutral’ stance and is not fighting against the appreciation of the Aussie anymore (back in November last year, Glenn Stevens insisted on the fact that the Aussie remained ‘uncomfortably high’ when it was trading between 0.9450 – 0.9500). Therefore, even if we feel pretty bearish on AUDUSD based on market sentiment (further decline in commodities such as iron ore, weakening trading partners…), we could potentially see a pause for a moment at around 0.9000.
The Aussie eased 100 pips against the greenback during Monday’s Asian trading session after officials figures showed building approvals fell 5.6% in April (vs 1.8% expected), which confirmed that the housing sector remains weak. However, we saw a lower than expected Q1 current account deficit on Tuesday (AUD 5.7bn vs AUD 7.0bn), which pushed Q1 GDP figures up a bit (3.5% YoY and 1.1% QoQ vs. 3.3% and 1.0% respectively).
The pair’s next support on the downside stands at 0.9200, which was hit a few times since the beginning of April. In case of a strong NFP report on Friday (expected at 220K), the Aussie could be sold to the 0.9120/30 zone (March 26th low and 100-SMA). We think it could be worth playing the ST downside ahead on Friday’s US employment data; we will try to short some AUDUSD above the 0.9300 level for a test back towards 0.9130 (tight stop loss above 0.9340).