Global macro overview for 20/07/2016:
The Reserve Bank of Australia Monetary Policy Meeting Minutes referred to both labour market and housing market with some degree of uncertainty. Moreover, the mention that inflation was expected to remain weak for some time resulted in an immediate repricing of the Australian short-term interest rate curve. The probability of the August interest rate cut increased to 62% from 45%. If the next CPI data for the second quarter that is due on July 27 will be still lower than expected, the RBA might cut the rates at its next meeting.
Let's now take a look at the AUD/USD technical picture in the daily time frame. After a false break out above the golden trend line, the market reversed back and now it is testing the support at the level of 0.7503. The dynamic support is being provided by the 100 DMA, but if the bear camp is strong, the price might be pushed lower towards the next support at the level of 0.2785.
