RBA June meeting minutes state that, the decision was “finely balanced”

During Today’s Asian session, we highlight the release of the RBA’s June meeting minutes, which were indicative of the bank potentially remaining on pause, implying that the current interest rate levels may be sufficient in combating inflation. As such, following the release of the monetary policy meeting minutes, market analysts now expecting one more rate hike and the bank remaining on pause for the rest of the year.In Yesterday’s  European session, we note the difference of opinions between ECB policymakers, as they speak in-front of the press with ECB’s Lane stating that the ECB is data driven and yet, the data will show whether or not the bank will hike in September, thus opening the door for a potential pause. On the other hand, ECB’s Schnabel has hinted that the bank should “err on the side of doing too much rather than too little”, re-affirming his position as a hawk, signaling his intentions to continue the ECB’s aggressive interest rate policy.In the European equities markets, we note the positive developments surrounding Airbus(#Airbus), with deals being made to sell 500 planes to India’s IndiGo Airline, worth approximately $50 billion. Furthermore, we also highlight the deal between Airbus (#Airbus) and Saudi Arabia, for a $6.7 billion deal to build military and civilian helicopter in collaboration with a local defense company. In the US Equities markets, where closed for a public holiday yesterday. However, we note the positive developments surrounding Intel (#INTC), who announced yesterday that they will be spending approximately €30 billion in order to build a chip manufacturing plant in Germany, whilst allegedly receiving €10 billion in subsidies. In addition, Intel (#INTC) has revealed plants to spend $25 billion in developing a chip manufacturing plant in Israel, highlighting the continued demand for chip manufacturing capabilities by numerous countries. Oil prices slipped today, after worries that China’s economic plans to boost activity appear to be insufficient to convince the markets.

USD/TRY appears to have halted at the 23.65 (R1) resistance level, as markets now await the interest rate decision by the Turkish Central bank. We maintain a bullish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart, which bounced off the reading of 50, implying a slightly bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 23.65 (R1) resistance barrier, with the next possible target for the bulls being the 24.50 (R2) resistance ceiling. For a bearish outlook, we would like to see a clear break below the 23.00 (S1) support level, with the next possible target for the bears being the 21.50 (S2) support base. However, we note that the Bollinger bands have narrowed, implying low market volatility and as such, should the pair remain confined between support at the 23.00 (S1) level and resistance at 23.65 (R1) level, we may see the pair move in a sideways motion.

EUR/USD appears to be moving in an upwards trajectory, despite correcting lower to the mid-range of the Bollinger bands. As such, we maintain a bullish outlook for the par and supporting our case is the upwards moving trendline incepted on the 16^th of June, in addition to the RSI indicator below our 4-Hour chart registering a figure near 70, implying a strong bullish market sentiment. For our Bullish outlook to continue, we would like to see clear break above resistance at 1.0975 (R1) with the next possible target for the bulls being the 1.1050 (R2) resistance ceiling. On the other hand, for a bearish outlook, we would like to see a clear break below the 1.0890 (S1) support level, with the next possible target for the bears being the 1.0815 (S2) support base.

Other highlights for the day:

In today’s European session we note the release of Germany’s producer prices rate for May, the Eurozone’s current account figure for April. In the American session, we note the US Building Permits and Housing starts figures both for May. On a Monetary level, we note the speeches by ECB Enria, Riskbank Governor Thedeen, ECB’s McCaul, Fed Vice Chair Barr and lastly ECB Vice President De Guindos. Furthermore, we highlight the release of the BOJ’s monetary policy meetings during tomorrow’s Asian session.

USD/TRY H4 Chart

Support: 23.00 (S1), 21.50 (S2), 20.35 (S3)

Resistance: 23.65 (R1), 24.50 (R2), 25.50 (R3)

EUR/USD H4 Chart

Support: 1.0890 (S1), 1.0815 (S2), 1.0735 (S3)

Resistance: 1.0975 (R1), 1.1050 (R2), 1.1125 (R3)

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