FxWirePro: RBA’s rationale behind AUD’s depreciation, RBNZ’s rate decision attracts buying binary puts for targets of 30-35 pips

The minutes of the monetary policy meeting of the Reserve Bank Board provided no real surprises from the perspective of the policy outlook. Ever since Australian domestic demand was not quite substantial to attain complete employment, in the face of the decline in business investment. So there was a need for some sort of adjustment on balance in lower exchange rate.

So the lower AUD has begun to have a constructive force on growth, but in between implied volatility was increasing amid AUD FX market was puzzled for its unexplained depreciation by the concealed rationale.

The outlook for policy remains data dependent with the Board concluding that "information to be received over the period ahead on economic and financial conditions would continue to inform the Board's assessment of the outlook and hence whether the current stance of policy remained appropriate

Technical glance:

Despite Steven's comments on currency depreciation AUD/NZD pair seems healthy as the strong support is currently testing at 1.1206 levels, any breach below this level on a closing basis would drag down until 1.1073 levels. Oscillating indicators are also converging in accordance with price fluctuations. RSI (14) is currently converging at 54.9427.

One can see shorting opportunities before Kiwis trading hours as the RBNZ's interest rate decision is scheduled today. Intraday trade idea would be buying binary puts on rallies for a target of 30-35 pips.