Global macro analysis for 05/08/2016:
The Reserve Bank of Australia quarterly statement on monetary policy was released overnight and it reveals some interesting conclusions. First, RBA projects the underlying inflation to remain under 2 pct for much of forecast period, reach 2 pct by end 2018. The policy easing (the latest rate cut) stimulates economic growth but offers no forward guidance. The outlook for the economy is still positive and the low inflation might allow even stronger growth. The AUD remains a significant source of uncertainty for inflation and growth forecasts, but some RBA projections indicate underlying inflation at 1.5 pct by the end of 2016, 1.5-2.5 pct by the end of 2017, and 1.5-2.5 pct by the end of 2018. Moreover, GDP growth is forecasted at 2.5-3.5 pct by the end of 2016, 2.5-3.5 pct by the end of 2017,and 3-4 pct by the end of 2018. At the end of the statement the RBA remarked that Brexit will have a limited effect on Australia's major trading partners.
Let's now take a look at the AUD/USD technical picture in the daily time frame. The bull camp is trying to push the prices higher above the golden trend line and technical resistance at the level of 0.7672. The market already trades above the 50, 100, and 200 daily moving averages, so if bulls manage to push the prices higher, then the next resistance is seen at the level of 0.773 and 07835.
