Australian Dollar, likely to consolidate from here in the near term, as it remains trapped in tug of war between bulls and bears.
Bulls are concentrating on the following
- Despite slowdown in commodity prices, affecting Australia's major exports and business investment, unemployment and growth hasn't deteriorated much.
- Domestic demand has remained relatively strong.
- Reserve Bank of Australia (RBA), likely to hold current policy steady.
- Australian Dollar has corrected a lot over the past years.
Bears, on the other hand concentrating on the following -
- Continued decline in commodity prices would keep deteriorating Australia's terms of trade and ultimately lead to further slowdown in growth.
- Further weakness in China, would be bad for Australia and Aussie.
So, Aussie remains trapped in the fight.
- Bulls will be trying to push Aussie towards 0.74 area, with stop loss around 0.685.
- Bears would be trying to sell at rallies and push Aussie towards 0.65 area with stop loss around 0.8 area.
For Aussie, 0.74 area likely to serve as crucial point. Aussie is currently trading at 0.706 against Dollar.
