The Australian dollar weakened sharply against the USD after the Reserve Bank of Australia (RBA) released meeting minutes. The minutes showed that officials were considering a rate cut if inflation did not move higher and unemployment rose. In these circumstances, officials said that a rate cut from the current 1.50% would be necessary. Presently, the unemployment rate is at an eight-year low of 4.9% while inflation is slightly below the 2% target.
Sterling was relatively unmoved in overnight trading as traders waited for the employment numbers. The unemployment rate is expected to remain unchanged at 3.9%. It has been at this level since February this year. The average earnings (ex-bonus) is expected to remain unchanged at 3.4%. The claimant count change is expected to decline to 20K, from the previous month’s 27K. The UK has two main challenges. Firstly, a no-deal Brexit will not be in its interest according to research by various entities. Secondly, the continued delay on the Brexit issue will lead to faded optimism among investors.
The earning season will continue today in the United States. Companies like Bank of America, Blackrock, Johnson & Johnson, Omnicom, Wipro, and UnitedHealth will release its earnings before the markets open. Others like Netflix, United Continental, CSX, and Interactive Brokers will release their earnings after the market closes. These results will come after the disappointing results from Goldman Sachs, whose profit of $2.25 billion was 21% lower than the same period a year ago. Its trading profit slowed by 18% from a year ago.
The EUR/USD pair moved up slightly to a high of 1.1300 ahead of the ZEW economic sentiment. This price is higher than yesterday’s low of 1.1292. On the hourly chart, the pair’s price is close to the middle line of the Bollinger Bands while the MACD has crossed the neutral line. The momentum indicator has remained relatively unchanged. The pair could move up to the previous high of 1.1325.
The AUD/USD pair declined sharply after the RBA left open the likelihood of a rate cut. The pair reached a low of 0.7138, which was the lowest level since Friday last week. It is also close to the 61.8% Fibonacci Retracement level. The decline led the RSI to reach the oversold level of 30. The Demarker too has moved further below the oversold level. There is a likelihood that the pair will resume the upward trend because the bank’s plan to cut rates was already expected.
GBP/USD
The consolidation of the GBP/USD pair continued ahead of the jobs numbers. The pair is currently trading at 1.3088, which is along the 25-day and 50-day moving averages. The symmetrical triangle continued to form, with the apex being close. The price is also along the 50% Fibonacci Retracement level. Therefore, there is a likelihood that the pair’s price will breakout in either direction.
General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.