Trading plan for 17/08/2018
Today’s session should be rather calm. During the night the President of the Reserve Bank of Australia made a speech, but it did not cause major market movements. PBOC strengthened the yuan a bit after depreciation lasting for several days.
On Friday, the 17th of August, the event calendar is light in important data releases, but in the morning we will get inflation data from the Eurozone, but there should be no surprise. In the afternoon, a similar publication will take place in Canada. Later during the US session, the US will post UoM Consumer Sentiment and UoM Inflation Expectations data.
AUD/USD analysis for 17/08/2018:
During the night, the President of the Reserve Bank of Australia was questioned in the parliament. Phillip Lowe assured that the next change in interest rates would probably go up, not down. As for now, one should observe a gradual progression of inflation and lower unemployment over the next few years.
Lowe thinks that the global risk has increased, he is afraid of escalating the trade war, but he is glad that Australia is on the way to full employment, but the citizens should wait a bit longer. The Management Board of the Bank does not intend to rush to a rate hike. The president is worried about the situation in developing countries, especially in Argentina, Brazil, and Turkey.
The real estate market in Sydney and Melbourne has slowed down, and finally, prices are falling. Generally, in the first half of the year, the economy of Australia accelerated significantly, even the drought that took place in the north of the country. A gradual wage increase should take place in the near future.
The global investors have heard all of this before, so the RBA has no intention of changing the view of monetary policy in any way since its positive action can be seen. The reaction of the market was negligible, AUDUSD during the speech only moved a few pips.
Let’s now take a look at the AUD/USD technical picture at the H4 time frame after the speech is made. The market is still fighting with the technical resistance at the level of 0.7279, where a few of Pin Bar candles were made already. Despite the recent bounce, the bull camp is clearly weakening and the momentum is now neutral again. The intraday support is seen at the level of 0.7246.