AUD/USD could fall to 0.7162 ahead of upcoming RBA meeting

ForexFraud

Central banking action is likely to affect the whole foreign exchange market this week.

Several major central banks are due to meet to discuss their latest monetary policy responses to the coronavirus crisis.

These include the Bank of Japan and the US Federal Reserve, both of which have already embarked on routes designed to stimulate their respective economies and get them moving again.

The Reserve Bank of Australia (RBA) is no exception.

The RBA will meet on Wednesday, and some market watchers have suggested that it could unveil further stimulus options to help the country’s flagging, recession-hit economy.

It was announced earlier in the month that the country was experiencing its first recession in almost three decades as a result of the pandemic.

Overall, the RBA appears to have a somewhat negative outlook for Australia.

It said recently that the fightback would be “bumpy”, and many have interpreted this as a sign that more intervention is to come.

The RBA is certainly committed to keeping yield targets in force for the foreseeable future – especially if there is a suggestion that the labour market could be at risk.

However, it is also understood that the RBA is against the prospect of introducing negative interest rates – a tool considered to be one of the ultimate options in ultra-low monetary policy terms.

In terms of the AUD/USD pair’s performance, this mixed picture could spell various potential technical outcomes on the price charts.

The currency is currently stuck within a set of tight boundaries.

One analyst suggested that it could return to its 50-day simple moving average, which was 0.7162.

In addition to the meeting of the RBA, meanwhile, the AUD/USD pair will also have to contend with some other fundamental events.

The first will be a set of meeting minutes from the most recent meeting of the RBA’s key committee.

These are due to come out at 1:30am GMT on Tuesday morning.

They will be accompanied in the same time slot by a house price index covering Q2 2020.

On a quarter-on-quarter basis, this was last recorded at 1.6%.

When measured year on year, meanwhile, it was seen at 7.4%.

There is still no indication of what these figures might change to this time around.

On Wednesday, meanwhile, there will be a so-called ‘leading index’ from Westpac and the Melbourne Institute.

This metric will cover the month of August and will look at almost 10 different measures of economic activity in Australia.

It will be released at 12:30am GMT.

The Australian housing market will be back in view shortly afterwards when new home sales figures for August are released at 1am GMT.

These figures will come from the country’s Housing Industry Association, and are widely expected to show a change from 64.4% to 79.6%.


ForexFraud

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