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:
- AUD/USD has broken out technically, hitting a fresh record high of 1.1080 last week.
- We have a pullback from the high that’s giving us a buying opportunity.
- We’re trading with the trend.
- Fundamentally, we read the RBA minutes as much more hawkish than some others and we’re going to trust our experience and knowledge.
- CPI was high last week and inflation is above target.
- Terry McCrann is a good RBA watcher and he’s overdue for a correct call.
- 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.