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  1. #1
    Specialist Member RCox's Avatar

    RBA Rate Decision Sets Up Tuesday Trade in the AUD/JPY !!!

    RBA Rate Decision Sets Up Tuesday Trade in the AUD/JPY

    This week's RBA interest rate decision should be a market mover, given the half that roughly half of the market is expecting a rate cut and the other half is expecting no change. This essentially means that roughly half of the market will be surprised no matter what the outcome, and this is a recipe for price volatility. If there is a majority expectation, it is for a "no change" result but there is enough scope here for a 25 basis point reduction if the RBA is concerned enough about the country's economic prospects.

    A "no change" result (holding rates at 3.0%) will be bullish for the AUD/JPY, and traders should look to enter into CALL options on a break above 102.30. A rate cut will be slightly more jarring for markets (and create slightly more volatility), and traders should look to enter into AUD/JPY PUT options on a break below 101.40.

    Rate decision is scheduled for 4:30 GMT on Tuesday, May 5th.

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  2. #2
    Senior Member LeeChang's Avatar
    The RBA rate decision will be good market shaker and a must trade event. I will closely watch the Aussie price action before, during and after the announcement and will trade accordingly. My suspicions are that no change will be made, as the Australian Bank interest rate was never below 3%. I am attaching a picture of the rate changes during the years. It could be seen there that the rate for the last few months is on 3% level. It will be bullish signal if it remains the same, but how strong I couldn’t say. If the low probability happens and RBA decrease the rate it will be strongly bearish and could drop immediately the Aussie with something like a hundred pips.

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  3. #3
    Active Member jephry88's Avatar
    This will be interesting event. For me the AUD/JPY is too dangerous to enter as the Yen itself could make some movements which could complicate the situation. Simpler and clear will be direct AUD/USD trade, probably a bit smaller volatility but still enough to make good entry. What will be your preferred timeframe for trading with binary option after the announcement? I think one hour will fit perfectly here.

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