Back at upper support line from long dated downtrend at 0.72 area on AUD and looking for pair to head lower towards mid 0.70 area before giving way for a retest of 0.69. Risk with this trade is if we get a US/China trade deal locked in before our trade has time to run lower on continued global growth fears and domestic housing problems for AUD. The move last week by one of the major banks to raise mortgage rates is likely to make the Australian central bank
, the RBA take note and slow down on any potential rate hikes. The housing market in Australia is a major concern with household debt at unsustainable levels and any cooling on global growth will impact
through to the domestic economy slowing interest rate rises.
Currently the rates market is pricing in a 30% chance of interest rate cuts during summer- should this increase AUD will reach new lows.
Looking to trade the recent trend channel highlighted.