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AUD/USD ignores RBA warning on Aussie strength, weak trade

The Australian dollar showed its resilience to some underwhelming data. The RBA left rates unchanged as expected and warned about the strength of the exchange rate. Australia’s trade balance surplus came out below expectations.

Nevertheless, not only did the pair refrain from falling, but even spiked higher and crossed the round 0.93 line to reach 0.9315 before getting back to range.

Here is how the spike looks on the chart:

AUDUSD May 6 2014 technical 30 minute chart currency trading after the spike

Australia reported a trade balance surprise of 731 million in March, lower than 1.2 billion  expected and 1.257 billion in February. In addition, the volume of exports shrank by 2% while imports remained flat after rising in the previous month.

This data did not have a significant impact and then came the RBA. Glenn Stevens and co. left the interest rate at 2.50% as widely expected and once again noted the exchange rate. Here is a quote from the statement: “The exchange rate remains high by historical standards.”

Owing in part to thin liquidity due to a holiday in Japan, AUD/USD shot up from 0.9280 to 0.9315 and eventually returned to range, but not lower.

Support is found at 0.9250 and resistance lies around 0.93.  For more, see the AUDUSD prediction.

 

 

 

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.