Today, April 3rd, the US Dollar is up by 0.3% and 0,41% gainst the Australian and New Zealand Dollar respectively. As you know, these are commodity currencies and therefore their exchange rates depend on commodity prices. Yesterday, they gained a lot against their American counterpart.
Well, as of today, the US Dollar has reversed yesterday's tendency and is currently strengthening against the Aussie and the Kiwi in advance of major economic reports from the USA scheduled for tomorrow. Apparently, the major report of the week is Non-Farm Payrolls.
On April 1st, the RBA conducted another meeting, which resulted in leaving the key interest rate unchanged at 2,5%. This matched market expectations. Still, the RBA said that the excessive strengthening of the Australian currency seen since the beginning of the year is threatening the Australian economic recovery. The Aussie has strengthened by 3,8% so far this year. The rally promoted inflationary pressure. All in all, the market threated the tone of the message as a pessimistic one. At first, the crowd failed to react accordingly but now it seems to start pricing the statement into the market.
The Australian economy used to boom when external investments flew into the country's mining industry, thereby accelerating the growth and leaving other sectors behind. After the investment period finished, the Australian economy witnessed redistribution of investments. All in all, the RBA is likely to leave the interest rate unchanged in the near future in order to avoid hindering the existing economic recovery. Experts predict that the central bank will only start raising the rates in early 2015 along with easier monetary policies.
At the same time, Masterforex-V Academy analyzed the H4 chart of AUDUSD to find out the near-term prospects and possible scenarios for the currency pair.
In particular, the analysis indicates a recovery started on January 24th form 0.8655. This recovery is taking place within the scope of a bigger-scale downtrend. At this point, the recovery is already over 50% of the preceding decline. Still, on April 1st, the price resume the decline, thereby indicating further weakening of the Aussie against its American counterpart. The decline started after the price made another local high at 0,9293 and was supported by the recent RBA statement.
If the Aussie finds some strength to regain the upswing against the US Dollar, the price is likely to break above the MF2 sloping channel. In this case, the price may well reach 0,9293 or higher (the green arrow).
Alternatively, a further decline will give way to 0,9045 and lower (the red arrow).
Meanwhile, experts report that commodity prices are likely to see further decline this year.
At the same time, investors are looking forward to the Nonfarm Payrolls report from the USA, which is scheduled fro tomorrow. Therefore, other currencies are weakening against the US Dollar. The further tendency will be seen tomorrow after the report.
Meanwhile, the H4 chart of NZDUSD is still indicating a mid-term uptrend started at 0,8050 in late February even though the price is currently retracing from the local high set at 0.8700 on April 1st.
The further tendency will clarify after yesterday’s employment report from the USA. At this point, there are 2 alternative scenarios:
A further decline will see levels of support at 0,8500 and 0,8438. The scenario is represented by the red arrow.
Alternatively, if the price resumes the rally, NZDUSD may encounter resistance at 0,8700. Once broken, it will see further highs. The scenario is represented by the green arrow.
