Global macro overview for 19/09/2017:
The Reserve Bank of Australia Monetary Policy Meeting Minutes has been released overnight. The members of the monetary policy committee notified that labour market conditions in Australia had continued to improve, although spare capacity remains. Employment had risen further in July, the participation rate had edged higher and the unemployment rate had remained steady at 5.6%. Full-time employment had risen strongly over the preceding year and had outpaced the growth in part-time employment over that period. Regarding the monetary policy, the members noted that the data received over the prior month confirmed that global economic conditions had strengthened since 2016. Growth in wages and inflation had generally remained subdued and core inflation had eased a little. This was expected to remain the case for some time. Nevertheless, a gradual increase in growth in wages and inflation was expected as the spare capacity in the labour market was reduced and the economy continued to strengthen, supported by the low level of interest rates. The appreciation of the Australian dollar over recent months, driven in part by a broad depreciation of the US dollar, was weighing on domestic growth and contributing to subdued inflationary pressure. A further appreciation of the Australian dollar would be expected to result in a slower pick-up in growth and inflation.
Let's now take a look at the AUD/USD technical picture on the H4 time frame. The drop from the multi-month high at the level of 0.8125 was stopped at the level of 0.7940, almost hitting the 61%Fibo retracement and bouncing from the golden trend line. Currently, the price is trying to test the nearest technical resistance 0.8043, but in order to test the recent highs, the market would have to break out above the 0.8066 level first.
