RBA Caps Commercial Interest in Australian Dollar

Royal Bank of Australia Leaves Interest Rates Unchanged

Commercial Traders Continue to Unwind Largest Position in Years.

 

The Australian Dollar has rallied approximately 10% since the beginning of June. Commercial traders were well prepared for this, having built up their largest position in more than 10 years through the month of May. However, as the rally progressed, commercial traders began to take profits. Much their exit was due to the Royal bank of Australia’s pending interest rate decision. They left rates unchanged on August 10^th. This should effectively cap the rally as much of the incentive has been taken out of the market. The recent topping action is therefore, a combination of technical (see ARSI), Fundamental, (commercial trader and news event (RBA rate decision.) We are selling the Australian Dollar Futures and placing a protective buy stop above the swing high at $1.0578. 

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ANDREW WALDOCK

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This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.