The Aussie lost more than 150 points on a back of weak data
Yesterday the Australian data were surprisingly lower than expected. This caused a sharp decline and the pair AUD/USD lost more than 150 points yesterday.
All this happened due to rising expectations that the Reserve Bank of Australia will go to the additional easing of monetary policy due to the low price pressure.
But after such an impressive fall we should understand "what's the next". Now, the Reserve Bank of Australia may soften the economy. However, it should be understood that the data could be skewed because of the sharp rise in the Australian dollar and the very low oil prices. The second quarter could clarify everything.
Today, other indicators haven’t been better than yesterday. The export price index decreased by 4.7%. The import price index decreased by 3.0%.
Today, it is worth to pay attention to the US GDP data. In the first quarter, the first estimate is 0.7% compared to 1.4% in the 4th quarter.
How to trade
We expect the consolidation in the range of 0.7550-0.7640, with the next decrease to 0.7490. We would buy put options if the pair falls below 0.7609.
Target price: 0.7609
Close price: 0.7627
Expiry time: 20:00 GMT