|

AUD/USD slides 30-pips on RBA’s priced-in 50 bps interest rate hike

  • AUD/USD takes offers to refresh intraday low even as RBA announced a 0.50% interest rate increase.
  • Hopes of US-China trade deal join downbeat Treasury yields to portray cautious optimism.
  • US dollar begins trading week on a back foot with eyes on Factory Order for June.
  • Fed Minutes, US NFP appear as the week’s key events.

AUD/USD fails to cheer the Reserve Bank of Australia’s (RBA) interest rate hike as it drops nearly 30 pips towards 0.6850 after the announcement. The reason could be linked to the mostly priced-in news impacts.

The quote’s latest weakness could also be linked to the RBA statement, “In Australia, inflation is high but not as high as in many other countries.”

Elsewhere, comments from Chinese Vice Premier Liu He suggests an improvement in the US-China trade ties, at least for now, which in turn favored the market sentiment previously. “The two agreed to need to strengthen communication & coordination of macroeconomic policies between China and the US,” said the macro update conveying telephonic talks between China’s Liu He and US Treasury Secretary Janet Yellen.

Additionally, expectations surrounding Aussie-China Foreign Ministers’ meeting in Indonesia and upbeat China Caixin Services PMI also favored the AUD/USD prices before the RBA.

China’s Caixin Services PMI for June rallied past market consensus and previous readouts as it flashed 54.5 figure, compared to 47.3 forecasts and 41.4 prior.

While portraying the market’s mood, the US 10-year Treasury yields approached the 3.0% level, up 1.70% intraday by the press time, whereas the S&P 500 Futures rose 0.40% by extending the previous two-day upside near 3,850.

In summary, AUD/USD traders appear unimpressed by the RBA’s 0.50% rate hike, as was widely expected. Hence, the intraday moves seek clues from the US Factory Orders for May, expected 0.5% versus 0.3%, ahead of Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June.

Technical analysis

A pullback from the key hurdle surrounding 0.6900, comprising the 10-DMA and the 13-day-old descending trend line, challenges AUD/USD buyers.

On the contrary, a downward sloping support line from late January, near 0.6755 by the press time, could restrict short-term declines of the AUD/USD pair, even if it fails to keep the latest run-up beyond the 0.6900 resistance-turned-support.

Additional important levels

Overview
Today last price0.6883
Today Daily Change0.0018
Today Daily Change %0.26%
Today daily open0.6865
 
Trends
Daily SMA200.6968
Daily SMA500.7036
Daily SMA1000.7197
Daily SMA2000.7221
 
Levels
Previous Daily High0.689
Previous Daily Low0.6792
Previous Weekly High0.6965
Previous Weekly Low0.6764
Previous Monthly High0.7283
Previous Monthly Low0.685
Daily Fibonacci 38.2%0.6853
Daily Fibonacci 61.8%0.683
Daily Pivot Point S10.6808
Daily Pivot Point S20.6752
Daily Pivot Point S30.6711
Daily Pivot Point R10.6906
Daily Pivot Point R20.6947
Daily Pivot Point R30.7003

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

GBP/USD trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD slips to daily lows near 1.1540

EUR/USD now loses further momentum and recedes toward the 1.1540 zone, or daily lows, on Monday. The pair’s bearish performance action comes as investors continue to assess Friday’s disappointing US jobs data in a context where renewed tensions in the Middle East lend decent support to the US Dollar.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

Crypto Today: Bitcoin, Ethereum, XRP eye short-term recovery amid ETF inflows
Cryptocurrency prices are gaining traction on Monday, with Bitcoin (BTC) trading above $65,000, Ethereum (ETH) holding the near-term $1,900 support and Ripple (XRP) hovering above the critical $1.00 demand zone. The broad recovery comes amid capital inflows through US-listed Exchange-Traded Funds (ETFs).
US Payrolls miss – RBA on deck tomorrow
It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.