News & Analysis

RBA cut interest rates

August 2, 2016

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» 6:30pm Construction PMI GBP
No release time, GDT Price Index – NZD

As expected the RBA cut interest rates by 25 basis points.  The AUDUSD dropped on the news but has retraced most of its drop. The AUDUSD lost 54 pips to .7488, buyers have come back in taking it back above .7500. The AUS200 lost ground after the disappointing building approvals and trade balance figures. It found some buying support post rates release but is currently still trading lower by 23 points. The USD and JPY have seen quiet trade so far today with small Asain session ranges. Signs did come in we might be some JPY selling but currently, it’s very choppy with little direction.
Tonight I’m looking for weaker opens in Europe with strong selling on the GER30 and UK100 overnight. The UK100 has broken out of a trend channel and is sitting around a support base. Gold is showing active sellers at 1354 this could come in as short term resistance off 1355. Price is still  in a short-term trend up but I would like to see 1354.20 closed above to show a continuation towards 1366 highs.
AUDUSD – Considering the negative influences today the AUD has held up very well. The rate cut took prices down to .7490, this area has shown support and indecision previously.  We have seen this area reconfirm today. I’d be paying attention to this level for the near term. Continued buying could set up a failed low if buying holds out tonight.
AUDUSD candlestick chart

US30 – Today’s price is sitting on a key short-term level. Overall we have a bearish channel. The key level 18395 has seen 5 tests holding up so far. To the top, we have a lot of downward pressure. A break lower set’s in new prices not seen since mid-July. A break above the channel sets up a continuation of the current trend which could offer a buy idea. If we see a break lower, I’d be looking for a test down to 18235.
US30 bearish

XAUUSD –  Gold is showing a normal trend formation with the current retracement not overlapping its previous high. 1355 is showing short-term resistance. Overall the picture still looks good on the Med term for continued higher prices. I would like to see any short term pull back to find support from 1333 to 1341. A break and close below 1333 could be indicating a lower high is coming in and confirming.
XAUUSD gold medium term rally

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All times are in AEST.
Written by Joseph Jeffriess, GO Markets Market Strategist


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