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AUD/USD Forecast 1 August 2016

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AUD/USD Forecast 1 August 2016
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The Australian dollar has strengthened significantly against the US dollar last week.

On Friday, the Aussie showed the largest increase. The pair added about 100 points.

Today the AIG Manufacturing Index showed an increase from 51.8 to 56.4 in July. The sales of new homes jumped by 8.2% in June. This figure is close to the record since 2008.

In China, business activity indexes also show growth: the Non-Manufacturing PMI rises from 53.7 to 53,9, the Manufacturing PMI - Caixin grows from 48.6 to 50.6. Only the National Manufacturing PMI fell slightly from 50.0 to 49.9.

It is worth to say that Australia's trade balance also grows 5 consecutive months.
However, the expectations of tomorrow's RBA decision limit the growth of the Aussie. The market awaits rate cut from 1.75% to 1.50%.

Tomorrow Australia will publish Trade Balance data in the June assessment. The forecast is -2.00 billion against the previous -2.22 billion. The RBA, of course, already knows the new data, but the Trade Balance is published before the meeting. And there is a chance that the RBA will refuse to lower the rate tomorrow.

So, if the rate is not changed, the Aussie is likely to increase to 0.7730, if the rate is reduced, we expect the pair AUD/USD at 0.7470.

How to trade

We would buy call options if the pair rises above 0.7630. We would buy put options if the pair falls below 0.7575.

Expiry time: 20:00

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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