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• Rouble is losing positions again in pairing with USD and EUR [11/10/2011]
• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

AUD: Australian Dollar determines movement direction

The Australian Dollar rate determines movement direction at the Forex currency market on Monday, while still being weak.

Forex forecast: MACD indicator is in the negative area for the pair AUD/USD and continues to go down, confirming a previous sell signal for the pair. Stochastic Oscillator is giving a pair buy signal, being in the neutral zone.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.9850 the pair will go to 0.9810 and 0.9770. If the level of 0.9920 is broken down, buyers’ target will become the levels of 0.9950 and 0.9980.

The reason of Friday’s fall of the AUD was the decision of China to raise the reserve requirements for the Banks by 50 basis points. Amid previous negative indicators for the AUD, which are still effective, the weakness of the currency is obvious.

Natural disaster still remains the main negative factor for Australian economy and Australian Dollar rate. Flooding started in the North East part of Australia and in Queensland and is now threatens to be the largest in the last 50 years. It is obvious now that the flooding is spreading to the South, to the area of Breesban, the third largest city of Australia. 95% of sugar production of Australia is concentrated in Queensland, as well as large amounts of coal. In general, about 20% of the entire economy of the Green Continent is located in the state of Queensland. According to various estimates, the growth of Australian economy can slow down by 0.2% in QI 2011, due to natural disasters. Note, that many companies have already reported losses sustained due to the flooding which will impact on Australian economy in full scale.

The meeting of the Reserve Bank of Australia is scheduled for 31 January and market will carefully wait for the comments of the RBA head, as the AUD future will depend on them in the short term. Interest rate in Australia is at the level of 4.75% per annum. RBA meetings in 2011 are scheduled for: 31 January, 28 February, 4 April, 2 may, 6 June, 4 July, 1 August, 5 September, 3 October, 31 October, 5 December.

Most likely, the AUD will remain under the pressure for a while and below the level of 0.9900.