- As expected, the RBA’s policy stayed unchanged. There was little change in the statement from the previous one.
- They still expect strong growth in employment but also kept their view on wages unchanged expecting them to continue weakening.
- Regarding the AUD, they reiterated that a higher exchange rate is going to add to the tame pressure on price but the Bank is still uncomfortable with the Aussies strength.
- AUD/USD traded lower on the news after the resistance just under 0.8000(R1) was hit. The rates remain between the sideways trend of 0.8000(R1) and 0.7800.
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North Korea helps Yen gain more
- Reports of the North moving a ballistic missile to their launch facilities renewed buying interest in the yen.
- After Sunday’s nuclear test, news suggests that it could test the missile by the 9th September, their foundation day.
- Even though the situation seems to be escalating, we believe that investors don’t expect a War yet.
- USD/JPY dropped due to the headlines, falling below 109.40(R1) and continued to trade in the sideways range of 108.70(S2) and 111.00.
As for today:
- We get Eurozone’s final services and composite PMIs for August as well as several other EU nations.
- Also we have UK’s PMI date from August and US factory orders for July are incoming.
- RBA Governor Phillip Lowe is going to deliver the statement and also speak during the European morning. We also have Feds Neel Kashkari and Fed board governor Lael Brainard.
- Support: 0.7940 (S1), 0.7880 (S2), 0.7850 (S3)
- Resistance: 0.8000 (R1), 0.8070 (R2), 0.8160 (R3)
- Support: 109.00 (S1),108.70 (S2), 108.30 (S3)
- Resistance: 109.40 (R1), 109.85 (R2), 110.20 (R3)