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AUD/USD, ASX 200 Analysis: The Aussie remains buoyant ahead of Lowe, AU GDP

Article By: ,  Market Analyst
June 7, 2023 1:02 AM

Market summary

  • The RBA delivered another 25bp hike (their 12th this cycle) to take their cash rate to 4.1%
  • Whilst the RBA suspect that ‘inflation has passed its peak’ it remains ‘too high’ and some further tightening may be required
  • AUD pairs were broadly higher, the Aussie was the strongest FX major, AUD/JPY closed to a fresh YTD high and the ASX 200 erased all of Mondays gains
  • The Canadian dollar was given a lift following the RBA’s hike, as it slightly increases the odds of a BOC hike tonight or hawkish tone (they have paused the last two meetings and we suspect they will hold again today)
  • Oil prices have done full circle, having filled Monday’s gap higher, pulled back towards $70 yesterday’s before rising back to Friday’s close (making it a directionless, tricky market to trade for now)
  • Wall Street was slightly higher but volatility was low for the S&P 500, Nasdaq and Dow Jones
  • Apple shares were a touch lower following Monday’s key reversal
  • The world bank increased global growth forecasts for 2023 but downgraded them fore 2024

 

 

Events in focus (AEDT):

  • 09:20 – Speech by Philip Lowe, Governor – A Narrow Path
  • 09:50 - Panel Participation by Michele Bullock, Deputy Governor
  • 11:30 – Australian GDP report
  • 13:00 – China trade data
  • 00:00 - BOC cash rate decision (hold expected)

 

ASX 200 at a glance:

  • A bearish engulfing day formed due to the RBA hike
  • 10 of its 11 sectors closed lower, led by consumer discretionary and industrial
  • Intraday support: 7127, 7110.8, 7100 and 7077
  • Intraday resistance: 7161.5, 7185.8

 

AUD/USD 1-hour chart:

AUD/USD posted a strong rally immediately following the RBA’s hike, prices have since pulled back into the VPOC support zone and are now trying to break to a new cycle high. A bullish pinbar formed at the end of the NY close so perhaps it can break above the weekly R1 pivot and continue higher towards 0.6700 / 1.67100, and the upper ADR band near the weekly R2 pivot. A break beneath the bullish trendline assumes a retracement against the June rally is underway.

 

 

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

 

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