Market insight 6 Sep
AUD/USD
The Reserve Bank of Australia kept the interest rate unchanged at 4.1%, in line with market expectations. This is the three consecutive months since June this year that the interest rate level has remained unchanged, and it has continued to maintain the highest interest rate level since 2012. The RBA basically did not change its monetary policy statement. In terms of inflation, it is determined to return the inflation rate to the target level. Inflation is expected to return to the target range of 2%-3% by the end of 2025.
As the Reserve Bank of Australia expressed ambiguity in its forward guidance and its assessment of the economy was slightly dovish, the AUD/USD dropped yesterday, or it may fall again to the lower support of 0.635 on H4 chat. Based on bottom divergence structure, the buying strategy would be adopted for short term price rally. Owing to downtrend, sell limit around 0.6500 is also acceptable if price arrives it.
GBP/USD
The UK economy is expected to grow in the third quarter. The country's services PMI index fell to 49.5 in August, but it was better than market expectations and preliminary estimates for the month. Although the lower average consumer confidence may suggest economic recession, demand looks strong, and GDP in September should be up 0.2% from previous quarter.
We can see GBP/USD dropped and then rebounded when touching Fibonacci 1.618 sequence on H4 chart. On the other hand, MACD negative histogram bar and double line is converging to constitute golden cross that means potential rising momentum is accumulating. As a result, buy limit could be set up from 1.2470 to 1.2500, but the stop loss strategy must be strictly executed.
