Global macro overview for 10/08/2016:
The Reserve Bank of Australia Governor Glenn Stevens has admitted the RBA faces a difficult job trying to balance various different risks. There are two risks: one is related to the housing market bubble and the other to the inflation target. Moreover, he added that the RBA's 2-3% inflation target was no longer valid, by giving deflationary pressures locally and in the global economy. Nevertheless, some economists insisted the target needs to be lowered, as there are growing risks associated with lowering interest rates too far to seek a high inflation outcome. In conclusion, just before the retirement, Mr. Stevens has clearly outlined the possibility of another rate cut if the inflation target is not met. The next RBA meeting is scheduled for September and it will be closely watched by the market participants.
Let's now take a look at the AUD/USD technical picture at the daily time frame. We can clearly see that the bulls have managed to break out above the technical resistance at the level of 0.7672 and they are trying to break out even higher above the level of 0.7763. The golden trend line had been broken as well, which clearly indicates that the next target for the bulls is the recent swing top at the level of 0.7835.
