Federal Reserve of Australia: Further loose monetary policy will gain greater attractiveness

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Last week was the first time that the Federal Reserve of Australia announced that it would continue to make more accommodative monetary policy adjustments for the economy affected by the epidemic. Therefore, the Australian dollar and New Zealand dollar basically fell in response, and have been continuously weakening recently. At that time, I posted articles or video analysis, which actually brought us trading opportunities for the Australian dollar. After all, in most cases, there is a selling expectation and a buying fact in the market.


[b]Today's Fundamental Analysis:[/b]
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Federal Reserve of Australia Release10The minutes of the monthly meeting stated that the committee members discussed how much traction further monetary easing could bring to increasing economic output. They realized that due to the suppression of some economic activities, certain parts of the transmission of more lenient monetary policy have been damaged.


The meeting minutes show that with the opening up of the economy, members believe that it can be expected that further loose monetary policy will gain greater attractiveness compared to before. The committee members also considered the impact of lowering interest rates on social confidence and those who rely on interest income. They discussed the potential impact of further easing monetary policy on financial stability. Further easing policies will reduce financial stability risks and thus reduce the number of non-performing loans by strengthening the balance sheets of the economy and the private sector.


New Zealand Federal Reserve Chairman Orr: Prepare to use a set of monetary policy tools to address deflation;


New Zealand Federal Reserve Chairman Orr stated on Tuesday that he is prepared to use a set of monetary policy tools to avoid deflation dominating the economy. In AucklandINFINZIn a speech at the conference, it was said that the failure of monetary policy is deflation, and I would rather fight against the quality issue of suppressing high inflation than the real challenge of fighting deflation.


The Federal Reserve of New Zealand has reduced its official cash interest rate to a record low0.25%And began implementing quantitative easing policies to achieve its1%-3%Policy makers are evaluating other tools to address the dual goals of inflation and sustainable employment, including negative wholesale interest rates for banks and term loans, if more stimulus measures are needed. Once again, the New Zealand Federal Reserve will11month11Japan's monetary policy statement updates its financing for loan program. He said there is still "a lot of room" in the current quantitative easing strategy.

From both speeches and official sources, it is clear that the next easing will be inevitable, just the size of the intensity. From the perspective of the quantitative easing strategy, there is still much room for improvement, and it is likely that the degree of easing this time will not be significant. Of course, this is also closely related to when the US second round of economic stimulus bill will be implemented. Therefore, in my opinion, if the easing policy is released and implemented before the US, Obviously, the strength will not be as strong as market expectations, but rather there will be phenomena of selling expectations and buying facts, leading to a strong rise in commodity currencies.


[b]Today's technical analysis:[/b]
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In fact, I forgot last week whether I showed you the trading plan chart of the AUD against the US dollar. It should be there. At least in my video release, I mentioned that there will be a new round of trading opportunities for the AUD in the future. So, based on the current market price, it has clearly reached our expected bullish first turning point, which is0.7035.So at this point, let's take a look at the performance of the market.


RSIThe indicator has clearly broken through the suppression of the trend line, which means that the market trend will gradually bottom out and then rise in the following changes. At the same time, the downward trend in prices has also caused a bottom deviation from the indicators. This signal means that market prices are about to bottom out. Therefore, based on the form, we are already able to participate in this transaction and enter the bullish market. So if there is another reversalKLine up, then it basically predicts the reversal of this trend


Author: Jinshi Dali
Deadline:2020/10/20
The above views are for reference only and do not serve as a basis for firm trading. The article is written by Jinshi Dali, and if reprinting is required, one must obtain their consent or indicate the source. If my article is reprinted without my consent, legal responsibility will be pursued in accordance with the law.