Sell on a level breakthrough of 0.7124 with 0.7066 target. Stop loss = 0.7174.
Reason for the trading strategy
At the end of 2015, the RBA lowered its GDP forecast from 2.50% to 2.25%, and the inflation forecast was lowered from 2.50% to 1.75%. According to the RBA, low inflation "may provide" space for the rate lowering in case of necessity. We assume that the RBA will lower its key interest rate by 25 bps to 1.75% in Q1 2016.