Daily Market Insights

 
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10/11/2017
AUD/USD Daily Signals
Aussie consolidates at the support zone

The Reserve Bank of Australia (RBA) announced its latest quarterly report on Monetary Policy including updated projections on GDP growth inflation and unemployment over the next few years.

In its previous forecasts, the midpoint had hidden inflation meeting 2% by the end of 2018 yielding to 2.5% during 2019. Instead of choosing to make its forecasts to the nearest quarter percentage point, the RBA has foregone the use of ranges. On the outlook for interest rates, the bank now forecasts to move back to the bottom of its 2-3% target range by the middle of 2019.

The bank’s headline inflation forecasts have been over casted from those previously offered in August. The involvements on the outlook for interest rates suggest that it could take longer for the RBA to start establishing its policy.

Apart the inflation, the board also modified its unemployment forecasts for the end of 2019.The Australia’s unemployment rate now seems to meet at 5.25% below as the 5.5% midpoint level offered in its previous forecasts in two year period.

On the outlook for economic growth, the bank’s new GDP forecasts were parallel to those offered in August. Until the middle of 2019, the forecasts indicate unemployment meeting around the current levels. Although an upgrade, over the next of couple of years suggests an outcome of wage pressure that will begin.

The AUD/USD pair provided a positive trading after testing the 0.7666 level again and gets a continuous positive support by the EMA50. This keeps the chances valid to rise from the support area towards bullish trend, which its next target located at the 0.7710 level. Therefore, we will continue to suggest the bullish bias in the upcoming sessions unless breaking the 0.7639 level and holding below it. The pair breaching at the targeted level will extend the bullish wave to reach the 0.7720 level as a next main station. The pair has broken the 50EMA and should hold above the MA. We expected the pair to test the 100SMA and look for price action momentum at this level. A further indication on the move currently suggests that the pair has completed decline and holds the support area indicating a longer uptrend is in place for coming days on the pair.

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