Such is the contrarians life, constantly getting burned while probing for the turn. Since Wednesday’s higher-than-expected CPI the market has fallen almost 300 pips which illustrates what the market’s sentiment is. Even EUR/AUD has made a sharp recovery, which shows exactly in what low terms the traders are thinking about the Aussie!
But I stick by my view that this move is a load of rubbish. The RBA will not cut rates next week. The local Australian economy remains quite robust despite plummeting commodity prices. As soon as the current AUD move against the EUR and JPY settles down then I will look to start trading the view again.