FX Market Wrap
The U.K. pound continued its slide higher throughout trading sessions, despite the of the chaos and confusion close the present Tory government, continued to assemble pace.
One more candidate proclaimed their intention to last the task of a leader, once missionary might leave the position within the second week of June, a former leader of the party voiced his issues relating to the number of candidates.
The Nasdaq dropped 1.6% on Monday, reinforcing a correction as it was drawn down by Alphabet, Facebook, and Amazon.com on worries the companies are the victims of U.S. government antitrust regulators. While the sell-off was the biggest drag on the Nasdaq, the index has been declining firmly since its May 3 record closing high as investors worried about slowing global growth amid an escalating U.S.-China trade war.
Inflation pulled up in the euro-zone in April with 1.7% on the headline and 1.2% on core CPI. Nevertheless, the impact may be entirely related to the so-called “Easter effect” – the fresh timing of the Easter vacation. Core inflation has apparently sunk in May, covering the way to a more dovish ECB ruling later in the week.
Headline inflation is predicted to fall from 1.7% to 1.4% and core inflation from 1.3% to 1%.
AUD/USD Tests 38.2% Fibo – RBA Cuts Interest Rates
The Reserve Bank has cut its official interest rate by 0.25 percentage points to a new record low of 1.25 percent.
RBA cuts rates to support jobs growth in the face of rising unemployment.
ANZ is the first major bank to move but only cuts variable mortgage rates by 18 basis points, holding back 30pc of the cut.
RBA warns low wage growth and falling house prices are the main uncertainties dragging down the domestic economy.
While it is the first change in the RBA’s policy-setting since August 2016, it was a widely expected result.
AUD/USD – Technical Outlook
On the technical front, the AUD/USD has violated the bearish channel at 0.6900 to place a new high around 0.6990. The pair seems to have formed out short-term support at 0.6865 and seems set to test the 50-day moving average (MA), currently at 0.7020 with the 14-day relative strength index (RSI) biased bullish above 50 and the 5- and 10-day MAs trending north.
Support and Resistance
Key Trading Level: 0.6926
S3: 0.6835 0.683
AUD/USD – Trade Tips
Consider staying bullish over 0.6960 to target 0.700 and 0.7035 today. All the best!