Global macro overview for 24/08/2018
The Australian dollar regained some losses from yesterday’s session thanks to the election of a new prime minister. Scott Morrison was previously the Minister of Treasury and chairman of the Liberal Party of Australia. A 50-year-old politician is considered to be a safe and good choice, as evidenced by the reaction on the financial markets.
Malcolm Turnbull stepped down from the prime minister’s chair, but at the end of his term, he said a few bitter words. He believes that he has been treated unfairly by his colleagues and colleagues from the party. He announced that he would soon leave the parliament. On the other hand, he congratulated Morrison on the appointment of the prime minister and thanked him for his loyal job as the Minister of the Treasury. He wished him all the best on his new career path.
Three candidates applied for the prime minister’s seat, and Morrison is the most stable choice. He is known for his decisive approach to governing and knowledge of the economy. He can enjoy his position at best for less than a year. In May 2019, parliamentary elections are scheduled to take place, but much is said in Australia about their acceleration.
In the meantime, economists issued a commentary on the monetary policy of the Reserve Bank of Australia. According to them, the central bank will not raise interest rates for a long time. The loosening should start in less than two years. Economists believe that there will be two rate hikes in the first half of 2020. According to earlier forecasts, the loosening was to start already in the first half of next year.
Let’s now take a look at the AUD/USD technical picture at the H4 time frame. The market has bounced from the technical support at the level of 0.7246 although new local low was made at 0.7237. The price is currently trading just below the 38% Fibo of the recent swing down at the level of 0.7292. The market conditions look oversold, but the momentum is still below its fifty level, so after the local pull-back completes, the downtrend is expected to continue.