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AUD/USD: care must be taken when opening long positions _19.08.2016

Technical analysis and trading recommendations-

Optimistic forecasts of the International Energy Agency (IEA) on the possibility of reducing the excessive world oil reserves as a result of the high demand and the statements by the Minister of Energy of Saudi Arabia Khalid al-Falih that his country is ready to carry on the oil market stabilization measures and join the OPEC decisions on freezing levels production, contributed to the rise in oil prices.

Oil and gas sector occupies an important place in the economy and in exports of Australia, and the Australian dollar quite noticeably react to oil price quotations.
Declining oil prices today after three weeks of growth contribute to the weakening of the Australian dollar today. But not only that.

Moody's has downgraded the outlook on the rating of the four largest Australian banks to negative from stable. It has justified this decision sluggish growth in profits due to slow wage growth, low interest rates, strong competition and growing household debt.

With the opening of today's trading day, the AUD / USD lost nearly 80 points, and the decline continues.

Earlier the pair AUD/USD rose well after better-than-expected employment data in Australia. Unemployment decreased by 0.1% to 5.7%. However, many economists say that the reduction in the number of jobs to full-time employment in July was the largest in nearly three years, which would be a negative factor for the economy and for the Australian currency.

Also on the agenda the question back on the direction of monetary policy the RBA at its further easing. Australia's central bank lowered the rate to a new record low of 1.5% earlier this month, and many economists expect further rate cuts, which will be negative for the Australian dollar.

After an encouraging growth in the beginning of the week in a general weakening of the US dollar AUD / USD is declining and it seems that the current week will close in negative territory.

Against the background of the expected interest rate increase by the Fed, even closer to the end of the year, caution should be used for the opening of long positions in the pair AUD / USD.

Friday, 19 Aug, 2016 / 11:12

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