Global macro overview for 07/02/2017:
The Reserve Bank of Australia had left the key interest rate unchanged at the level of 1.5%. In the RBA rate statement, the officials justified the decision based on the economic forecast for 2017. According to RBA, the economy is expected to expand at an annualized pace of 3% over the next several years, while inflation is likely to rise above the Central bank's 2% inflationary target already this year. The inflation in the last quarter rose only 1.5%, so it is still well below the RBA target of 2.0% and it still does not look it is getting any near this level for now. The RBA analyst team indicates that they should follow the currently popular path of not easing the monetary policy for now, just as many other central banks do. Some of the analysis suggested that RBA should keep the interest rates at the current level to 2018 or even longer. In conclusion, no surprise from RBA this month and very dovish rate statement mainly due to slow economic growth and no inflationary pressures.
Let's now take a look at the AUD/USD technical picture after the news was released. The market was capped at the level of 0.7693 and now reversed towards the next important support at the level of 0.7609. If this level is violated, then the next support is seen at the level of 0.7523. This last level is the key near -term technical support level for the bulls.
