The Central Bank of Australia can decrease the rate earlier than expected
It’s worth to pay attention at the pair AUD/USD. Yesterday after the meeting of the RBA, the Australian dollar began to strengthen, as the regulator saved interest rates unchanged. However, an hour later, the more detailed analysis of the performance of the Central Bank caused a sale of AUD/USD.
What should we expect next? If the demand for safer assets may appear sometimes, the RBA position is very important as the long-term factor of influence. At this time, the regulator has made it clear that he does not like the mood of the Fed and the rise of the Australian dollar.
And the fact that most of the central banks of the world prefer to implement soft monetary policy, the Central Bank of Australia can decrease the rate earlier than expected. This means that at the moment, after the sale the pair AUD/USD still has the potential for growth, as the RBA keeps calm.
But the attempts of the pair AUD/USD to come closer to the mark of 0.80 may cause a sharp reaction of the Central Bank. Thus, in the medium term, we can expect the recovery of the pair AUD/USD to the 0.77 area and even to 0.7860.
How to trade
We would buy CALL options if the pair AUD/USD rises above 0.7574.
Target price: 0.7574
Close price: 0.7604
Expiry time: 20:00 GMT