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AUDUSD hit a high during NY session at 0.9790 after after a two wave move once at 10pm and another time at 11pm Singapore time.

Since then, it has been retracing all the way down to the current 0.9715 level.

I SHORT the AUDUSD this morning at 0.9745 and squared the position at 0.9720 for a quick trading profit of 25bps or 0.25%.

I believe RBA will keep rates the same and will have nothing exciting to say in the press conference.  I believe the RBA and the Aussie government are stuck in a corner as to how to re-energize the economy.

The Aussie economy has been reliant for too long on resources to fuel its growth in the past 5 years.  It has also relied heavily on foreign capital and domestic capital to fuel the housing market.

Let’s not forget that during the worse of times the past 2 years, the Aussie has been trading between 1.03 and 1.05.

I believe we are passed the bottom, and in the near term, the AUDUSD will range bound between 0.96 and 0.98.  We need to see some credible news from the Aussie government as to how they are going to structurally change the economy domestically to fuel growth.

The danger is alot of central banks are still holding AUD, when the situation in Europe and the United States is better, capital will flow out of Australia back to the home countries and it will put downward pressure on the AUD.

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