The Australian dollar is in recovery mode against the dollar following the drop that happened late last month. The currency has managed to recover from a low of 0.7789 to the current high of 0.795. All eyes are now on the Reserve Bank of Australia (RBA), which will release the minutes of the previous meeting. Traders will want to read the RBA’s tea leaves about the status of the economy and the pace of future interest rates.
The EUR/USD pair is little changed following no major political developments during the weekend. Today, with no major economic data expected, and with the US being on holiday, there is a likelihood that the pair could trade within a narrow range. Looking ahead, traders will focus on Germany’s consumer climate data which will be released tomorrow. They will also focus on the Fed minutes which will be released on Wednesday.
The cable is little changed, following an uneventful weekend in the US and in the UK. Traders are now focusing on Wednesday, when Governor Mark Carney will deliver a speech. They will want to get the clues about how the BoE expects to keep the rising inflation rate in check.
EUR/USD
The pair has fallen from the multi-year high level of 1.2561 to a low of 1.2414. The slight fall has come at a time when volatility is easing as traders shrug off the risks of rising inflation. The pair is trading in the middle of the 25-day and 14-day moving average, with the RSI falling to 50. The most likely scenario is where the pair recovers from the dip to get to the 1.2472 level.
AUD/USD
The AUD/USD pair has formed a symmetrical triangle, which places it at an ideal position for a break out. The pair is currently trading at 0.7920. At the same time, the pair’s MACD shows a neutral stance following last week’s slight correction. The pair’s RSI is at 48. Today, the pair could continue trading within a range, with a breakout in either direction coming tomorrow after the release of RBA’s minutes.
GBP/USD
The pair is currently trading at the 1.4031 level, which is down from the monthly high of 1.4146. The pair is trading at the 14-day moving average level, which is also at an important support as shown below. The most likely scenario is where the pair trades above the support level and tries to recover the lost gains. If this scenario works out, the next price target will be 1.4150.
, which will release the minutes of the previous meeting. Traders will want to read the RBA's tea leaves about the status of the economy and the pace of future interest rates.){kind=link}