Global macro overview for 04/10/2016:
The Reserve Bank of Australia decided to keep the target 'cash rate' unchanged at the level of 1.50%, just as expected. In the statement, Governor Philip Lowe, said the global economy is growing at a slower pace than anticipated and Chinese economic growth seems to be moderating as well. This was the main reason behind the interest rate decision, as RBA says steady rate are consistent with GDP growth and inflation targets. Moreover, Governor Lowe said that the rising Australian Dollar could complicate economic adjustment as the inflation is expected to remain low for some time. In conclusion, plenty of dovish remarks from the RBA board suggest the RBA might wait for a FED decision until December to see whether they will hike the interest rate first.
Let's now take a look at the AUD/USD technical picture after the RBA interest rate decision. The reaction was somewhat muted so far, but the spike down after the news has been almost fully retraced. Currently, on the bigger time frame, the market is still trading below the golden trend line which suggests the bull camp still did not throw the towel. The next key resistance is seen at the level of 0.7708 - 0.7763 and the key support is seen at the level of 0.7441.
