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No changes from the RBA meeting

  • The RBA didn’t change his policy today, as already priced in by the markets. The policymakers maintained a balanced tone, slightly more optimistic on the labour market, with no mention of a possible China slowdown.
  • This tone brought some gains to the AUD, which recovered previous losses due to soft trade data that came out just a couple of hours earlier. The slowdown in trade data could generate some worries about tomorrow’s GDP data for Q1, but, given RBA’s balanced bias, in our opinion the Aussie could remain supported, at least before GDP data.
  • AUD/USD rose yesterday following the policy meeting, after it hit support at 0.7420 (S2). We believe it may remain supported, at least until the GDP for Q1 data, and maybe challenge the 0.7515 (R1) resistance level.



  • Support: 0.7455 (S1), 0.7420 (S2), 0.7395 (S3)
  • Resistance: 0.7515 (R1), 0.7550 (R2), 0.7600 (R3)

Yen rises after upbeat wage data

  • JPY came under buying interest during the Asian morning on Tuesday, after Japanese wage growth data for April showed a higher-than-expected increase. Wage growth is usually regarded as a positive sign for inflation, thus it may have started speculation for a future rise in inflationary pressure.
  • Japan’s labor market is showing extreme tightness at the moment, with unemployment rate stable at 2.8%, the lowest rate in 22 years. More positive wage and/or inflation data could fuel speculation for a less dovish tone from BoJ in a not-too-distant future.
  • USD/JPY registered heavy losses overnight, stabilizing around the 109.70 (S1) support level. The break below 110.30 (R1) signals a downside exit from the sideways range in which price action had developed since the 17th of May; this, in our opinion, turns the short-term outlook for the pair to the downside and increases the possibility for further losses.



  • Support: 109.70 (S1), 109.35 (S2), 108.90 (S3)
  • Resistance: 110.30 (R1), 110.75 (R2), 111.25 (R3)

 Today’s highlights:

  • Eurozone: Retail sales for April (usually not a major market mover).
  • US: JOLTS job openings for April. The forecast is for the figure to decline.
  • Canada: Ivey PMI for May. The index is expected to have declined, but still at high levels. Because of this, we don’t see the possibility for any major negative reaction in CAD if the data comes out as expected.

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