AUD/USD: arguments in favor of lowering RBA interest rates

Yuri Papshev Independent Analyst

Rising unemployment and low inflation increase the pressure on the RBA to lower interest rates. "During the meeting on June 4, interest rate cuts will be discussed", RBA manager Philip Lowe said on Tuesday. According to him, "new stimulating measures could help accelerate economic growth".

In the minutes from the May meeting of the RBA published today, it is stated that "the lack of improvement in the labor market situation is an argument in favor of lowering interest rates". “Without easing monetary policy in the next six months, we should expect lowering forecasts for GDP growth and inflation”, the RBA leaders concluded.

International trade conflicts, primarily between the United States and China, also pose a risk to the Australian economy. Investors estimate the likelihood of the June decline in RBA rates in more than 50% and 100% in August.

Against this negative background, the decline in AUD/USD continues. Below the key resistance levels of 0.7120 (EMA144 on the daily chart), 0.7170 (EMA200 on the daily chart) short positions remain preferable.

AUD/USD remains in a long-term bearish trend. The lows of the global wave of decline, which began in July 2014 from 0.9500, are located near the mark of 0.6830. AUD/USD may reach this level in the coming days.

The objectives of the upward correction are located at the resistance levels of 0.7015 (ЕМА200 on the 4-hour chart), 0.7100, 0.7120.

However, for now, only short positions should be considered.

Support Levels: 0.6830, 0.6800

Resistance Levels: 0.6932, 0.6980, 0.7015, 0.7100, 0.7120

Trading Scenarios

Sell in the market. Stop Loss 0.6910. Take-Profit 0.6830, 0.6800

Buy Stop 0.6910. Stop Loss 0.6870. Take-Profit 0.6932, 0.6980, 0.7015, 0.7100, 0.7120

Author

Yuri Papshev

Independent Analyst

Independent trader and analyst at Forex market. Trade experience - more than 10 years. In trade Yuri Papshev uses a combination of fundamental and technical analysis.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.