Originally published by Blueberry Markets
Recently the RBA has announced a hold on interest rates whilst they monitor the risk of the current housing crisis. Housing prices have continued to fall with some reports suggesting a further 5 percent decline before the end of 2019.
A study showed that over 450,000 homes in Australia are falling into negative equity, that is almost 10% of the country owing more even upon the sale of their property.
The RBA also warned that they are keeping a close eye on employment figures, as an increase in unemployment could force them to cut interest rates.
Not only is the Australian economy looking weak, but the Chinese economy is also showing slowdown and with important trade talks between the US and China coming Thursday and Friday, the RBA will be hoping for some positive news here. You can see any slowdown in the Chinese economy overspills into the Australian Dollar causing a further downturn.
Last week the AUD/USD market closed significantly bearish after re-testing a key trendline resistance. We can see the 0.7050 still offers a good demand zone for the currency pair but with the data continuing to be bearish a break and close below the key zone will bring in fresh sellers.
Taking a closer look at the daily chart we can see we need to close below this key demand zone before looking for further downside here. A break will see prices head towards the 0.6800 targets, and lows of the previous ‘flash crash’.
