RBA keeps rate at 2.00%

RBA’s decision yesterday was in line with everyone’s expectations, the interest rate being kept at 2%. Thorough this decision, they remain constant in sustaining an impartial opinion regarding a possible dovish tone. Although the Australian economy is in continuous expansion, key commodity prices are still far away than last year’s recordings. The aussie rallied almost 150 pips all day long, reaching a 0.7405 10-days high but settling at 0.7400.

Switching to Europe, United Kingdom’s Markit CPMI (Construction Purchasing Managers’ Index) dropped to 57.1 from June’s 4 –month high of 58.1. In the official report, the reason stated is that of a slight loss of momentum in the new jobs sector and in business activity. Both indicators had a smaller growth rate than in June, except the niche of new work in construction companies which kept pace with June’s readings. The high demand in construction supplies is depleting inventories and is overcoming production, driving input prices up in July. The inflation reached its highest point since March. Over the last month, the trend of GBP/USD was a flat one. We have the upper resistance at 1.5660 which must be broken if we would like to see an ascending trend. After that breakout, we will shift our attention to the next major resistance level at 1.5800. The support level at 1.5520 is followed by the 1.5455 one, which now is the bottom line from our trend.

The USD-JPY trade-off is going sideways for the last few sessions, the current evolution pointing towards a consolidation near the 124 threshold, marking the support/resistance point. Uncertainty remains until the pair will break the minor trend line in order to hike upward. Technical analyses set 125.6 as the top support and 123 as lower level support in case the price will break that minor trend line.

Monday’s aggressive sell-off was recovered yesterday, crude oil prices covering distance trying to move away from the several-months WTI trading of nearly $45.00 / barrel. The economy shifted in such a way yesterday that the crude was able to recoup from the recent lows, concerns still remaining regarding the oversupply issue haunting investors’ decisions. This week’s report on crude oil inventories should be a major point of interest, with EIA inventories being published later today (previous +4.2 million barrels) and USA’s rig counts being published on Friday by Baker Hughes (previous 664).