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Last night (at 12:30 am est) markets were set to respond to the anticipated interest rate cut on the Australia dollar from 1.25% to 1.00%. It is typical to see these cuts send a currency free falling, however, we did not see that last night as the AUD/USD currency pair is currently up .15% since the news and .33% on the day. This is likely due to the anticipation and expectation of a rate cut, thus creating a “that’s too easy” trade for investors. With that, it is likely that banks and other large market participants used this high volume opportunity to increase positions which pushed the markets to the upside. This, however, does not mean that the markets will not see moves to the downside after the news settles in. Be wary though, as markets close early tomorrow and are closed Thursday for independence day.
What we can take away from this on a technical level is that the 1 hour clearly pulled down into a prior fresh range (bottom extreme support zone) right after the news hit in order to collect sellers liquidity. We also saw that the market was trading on a considerably significant support zone (shown below). We can identify this by looking left and identifying the most recent range that saw a significant rejection from this level, more information about how to draw zones here.
If you do have any question feel free to leave a comment or email me! If you think this can help someone make sure to share!