SEP 8, 2021
- RBA carried out dovish tapering
- QE tapering to last until February 2022
- Potential downside in AUD/CHF
Chart 1: AUD/CHF D1 chart
AUD/CHF has been trying to breach above the 0.68 handle ever since it broke below in mid-July but to no avail, resulting in a bigger downside each time. Few days ago, AUD/CHF traded up to the 0.68 handle once again, coinciding with the Reserve Bank of Australia (RBA)’s monetary policy announcement. A decision to proceed with quantitative easing (QE) tapering will put AUD/CHF in a good position to break above the 0.68 handle.
However, the RBA opted for a dovish taper, reducing its bond purchases from the previous A$5 billion per week to A$4 billion per week while extending QE until at least February 2022 instead of the previous plan of early November 2021. The central bank explained that its decision “reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak”.
Therefore, the Australian dollar is likely going to weaken for now due to the dovish tapering. Our technical indicators are beginning to show signs of downward momentum. Hence, look for selling opportunities of AUD/CHF.
Trade Setup for AUD/CHF (D1)
Sell Stop at 0.6750
Upcoming major news that may impact price movement of AUD/CHF
08 September – Reserve Bank of Australia Deputy Governor Debelle speaking at 1610 (GMT+8)
09 September – Reserve Bank of Australia Deputy Governor Debelle speaking at 1635 (GMT+8)
16 September – Australian employment data release at 0930 (GMT+8)
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