RBA hikes rates, Powel about to speak

The USD continued to be on the rise against its counterparts, yesterday in the aftermath of the release of a better-than-expected US employment report for January, yet there were some signs of stabilization during today’s Asian session. On the other hand, US stock markets tended to send out mixed signals yesterday, as the market is also influenced by the high number of earnings reports released, despite an initial bearish reaction to the substantial rise of the NFP figure and the tick down of the unemployment rate on Friday. Market expectations for the Fed to remain rather hawkish seem to have solidified and attention turns to Fed Chairman Powell’s speech later today. Should the Fed Chairman maintain a clear, confident, hawkish tone in his speech today, we may see renewed bullish tendencies for the USD today while US stock markets may weaken once again. On the flip side, we note that Gold’s price started to edge higher yesterday, breaking the negative correlation with the USD and seems to have the necessary tailwinds to gain even further today, yet that remains to be seen. Across the world, we note that RBA’s interest rate decision caused the Aussie to jump during today’s Asian session. The bank as was widely expected hiked rates by 25 basis points and the bank had the confidence to signal more rate hikes to come. The bank’s worries about the inflationary pressures in the Australian economy seem to intensify as Governor Lowe, in his statement mentioned that “In underlying terms, inflation was 6.9 percent, which was higher than expected”. At the same time, there is confidence in the Australian employment market as the Governor stated that “The labor market remains very tight… Job vacancies and job ads are both at very high levels, but have declined a little recently”. Hence it should come as no surprise that the bank’s Governor in his forward guidance stated that “The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target”. We see the case for the hawkish stance of the bank to continue to support on a monetary level yet AUD traders should remain vigilant about China’s fundamentals as well as for data from Australia.

AUD/USD was on the rise during today’s Asian session, managing to resurface above the 0.6900 (S1) support line. For the time being, we expect the pair to stabilise somewhat, yet some bearish tendencies may remain present. Should the bears take over once again we may see the pair breaking the 0.6900 (S1) support line and aim for the 0.6800 (S2) support level. Should the bulls be in charge we may see AUD/USD breaking the 0.7010 (R1) resistance line and aim for the 0.7125 (R2) resistance level.

USD/CAD edged a bit lower during today’s Asian session correcting lower than the 1.3465 (R1) resistance line, yet the bears have still to prove their case. For the time being we maintain our bias for a sideways motion of the pair. Should a selling interest be expressed by the market, we may see the pair breaking the 1.3335 (S1) support line and aim for the 1.3230 (S2) level. Should the pair find fresh extensive buying orders along its path we may see USD/CAD breaking the 1.3465 (R1) resistance line and aiming for the 1.3570 (R2) level.

今日其他亮点:

Today in the European session, we note the release of UK’s Halifax House Prices for January and later on New Zealand’s biweekly milk auction figures. On the monetary front, we note that ECB’s Knot and Kazimir, BoE’s Deputy Governor Ramsden, BoE’s chief economist Pill and ECB Board Member Schnabel are scheduled to speak. In the American session, we note Canada’s Trade Balance for December, and just before Tuesday’s Asian session starts, oil traders may be interested in the release of the API weekly crude oil inventories figure. On the monetary front besides Fed Chairman Powell please note that also Fed Vice Chair Barr and BoC Governor Tiff Macklem are scheduled to speak. During Tuesday’s Asian session, we note the release of Japan’s current account balance for December.