ISM Manufacturing PMI will determine the dynamics of AUD/USD today
The Aussie significantly weakened against the US dollar last week. Inflation came out significantly below expectations, 1.3% vs. 1.8%.
In this case, the decision of the Reserve Bank of Australia takes on new meaning. Such dynamics of the indicator gives reason to believe that the regulator may cut the rate.
However, if we consider the April meeting, it can be assumed that the RBA is not ready to soften the monetary policy. The only thing which concerns the RBA is the growth of the Aussie, which can slightly complicate the process of economic recovery. Most likely, we won’t see the rate cut at the next meeting.
Today, it is worth to pay attention to the ISM index of business activity in the manufacturing sector.
How to trade
It is possible that the pair AUD/USD will attempt to return to the area of 0.7750. However, even a small hint of the deterioration of the economy and, consequently, a possible rate cut in the near future may be sufficient to support the pair to 0.7400. Today we would buy call options if the pair rises above 0.7633. We would buy put binary options if the pair falls below 0.7590.
Expiry time: 20:00 GMT