Buy AUD Ahead of RBA Decision

Our best trades over the past month have been on Australian fundamental data so we’re going to continue to stick with what works by buying AUD/USD ahead of the RBA decision at 1.0970. That’s 110 pips below the record high and we’re expecting AUD to blow through that level by the end of the week.

I published my analysis of the RBA at ashraflaidi.com earlier today. http://tinyurl.com/3jhc7du

Let me sum up my thinking briefly:

  1. AUD/USD has broken out technically, hitting a fresh record high of 1.1080 last week.
  2. We have a pullback from the high that’s giving us a buying opportunity.
  3. We’re trading with the trend.
  4. Fundamentally, we read the RBA minutes as much more hawkish than some others and we’re going to trust our experience and knowledge.
  5. CPI was high last week and inflation is above target.
  6. Terry McCrann is a good RBA watcher and he’s overdue for a correct call.
  7. Our downside is limited. We have a 60 pip stop at 1.0910 and don’t expect it to get hit even if we’re dead wrong.
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