The RBA cut interest rates by 25bps a short while ago and the Australian dollar has tumbled
Some called the RBA rate cut a surprise move but there was always (more than) a chance that the RBA might pull the trigger today after recent weak data. The overnight index swaps market had priced in a 54% chance of a cut.
So where from here? Well, there's exporter-led demand into 0.7550 which is holding the rapid fall so far and behind that more bids around 0.7525-30 with larger tech support/bids into 0.7500.
Rallies will be sold though as they invariably are though to fill the gaps after such a move. Longer term traders may be viewing this as a good buying opportunity but there will be plenty of others looking for more losses in the short term or at least that rallies should/will be capped if only to bail themselves out of horrible longs.
We should see some good two-way business from here and I wouldn't rule out another attempt/break of 0.7550 with first layers of offers into 0.7575-80 then 0.7600 with more into 0.7650. I'll bring you some revised order boards as soon as I can. Options traders searching for interesting information may want to visit the binary options blog by 10trade to help them understand some of the order concepts.
Currently 0.7561 demand may also come from AUDJPY support but yen pairs generally will remain on the back foot while markets remain BOJ-free.
As I type Deutsche Bank are forecasting rates to be cut further to 1.25% by mid-2017.
