Forex Marketz Daily Forex News – Fully Markets Update
Three points to consider:
- The AUD/USD lost more than 0.5 percent in early morning trading.
- July’s retail sales (monthly) in Australia dropped to a 14 month low.
- It is likely the Reserve Bank of Australia (RBA) will cut rates soon.
The AUD/USD Forex market lost ground today as the Australian Dollar fell after disappointing data was released on the news wires. The AUD lost 0.5 percent in early trade today after July monthly retail sales fell -0.1 percent. It was expected to expand 0.4 percent and they printed at 0.6 percent in June. This was the lowest reading since May 2014 and the first contraction since that time as well.
The Reserve Bank of Australia (RBA) in its most recent monetary policy statement said that consumption growth was up since its recent low in 2013. At its last monetary policy meeting, in September, the RBA kept language the same and said rate decisions would be based on data and how the economy performs.
Australia has seen its first contraction of retail sales growth in nearly 14 months and this took the financial markets a bit off guard. Australian bonds took a bit of a hit. The Australian front-end government bonds, two year notes, saw their yields drop 0.8 percent today. This nearly matched the Australian Dollar’s decline. This is adding fuel to the fire that the RBA will cut rates sooner than expected.
Technical Analysis
Looking at today’s AUD/USD technical analysis notes near term support at 0.6988. A daily close below this technical level challenges the technical support at 0.6879. The alternative AUD/USD technical analysis, should the Australian Dollar recover, notes former support, now resistance lining up at 0.7092. A break above this level challenges the next technical resistance level at 0.7224.
