Australian Dollar stays generally pressured today as RBA’s November meeting minutes struck a more dovish than expected tone. Board members noted that “a case could be made to ease monetary policy”. They refrained from easing further this month because of the concerns about “the negative effects of lower interest rates on savers and confidence”. They, however, retained the view that lower interest rates could support economic growth via traditional channels, such as “a lower exchange rate, higher asset prices and higher cash flows for borrowers.
Suggested readings on RBA:
- RBA Minutes: Members Considered Rate Cut This Month. Disappointing Job Report Raises the Case for Further Easing
- RBA Minutes Signal that the Board is in “Monitoring” Mode
AUD/JPY’s recovery from 73.35 was weak, and held below 4 hour 55 EMA and 74.56 minor resistance. Overall outlook is unchanged that corrective rise form 69.95 has completed with three waves up to 75.67, ahead of 76.16 structural resistance. Further fall is expected as long as 74.56 holds. Below 73.35 will target 71.73 support first. Break will solidify this bearish case and target a test on 69.95 low. Nevertheless, above 74.56 will dampen this bearish case and turn focus back to 75.67/76.16 resistance zone.
