Last month, Westpac revised their Australian GDP growth forecasts for 2019 and 2020 to 2.2% (2.6% previously). Furthermore, Westpac now expects a rate cut by the RBA in August and November of this year. Nomura has now followed suit, expecting the RBA to cut by 25 bps in July and 25bps in August. So, although the timing is different, the sentiment is the same.
The RBA will release its cash rate and statement at 3:30 am (GMT) and if it expresses dovishness as per the Westpac and Nomura expectations, the AUDUSD is certainly vulnerable to the downside as the market adjusts.
The below is the daily chart of the AUDUSD. Technically, the currency pair has charted a lower peak. If price drops below the green horizontal it will also have charted a lower trough i.e. a lower peak followed by a lower trough. This is the classical definition of a downtrend as per peak and trough analysis. We note that the RSI(9) is already below 50 which is indicative of an underlying bearish momentum (blue rectangle).
