Global macro analysis for 05/07/2016:
The Reserve Bank of Australia decided to maintain the benchmark interest rate at the level of 1.75% overnight, just as expected. In the Monetary Policy Statement, RBA Governor Glenn Stevens concluded his speech saying "further information should allow the board to refine its assessment of the outlook for growth and inflation, and to make any adjustment to the stance of policy that may be appropriate." This might mean that next quarterly CPI reading in July might be the key fundamental data for the RBA in order to make a decision on a further rate cut. Moreover, Stevens acknowledged Britain's vote to quit the European Union, but largely dismissed its economic impact on Australia. In conclusion, the Australian economy is still being supported by weak currency and record-low interest rates, but it looks like another rate cut this summer seems unavoidable.
Let us now take a look at the AUD/USD technical picture on the daily time frame. The outlook is not that clear because the market still trades below the brown trend line and at the same time above the 55,100 and 200 DMA., just in the middle of the range. It looks like this situation can last until the next RBA's rate decision. The important support is seen at the level of 0.7143 and important resistance is seen at the level of 0.7835.
