The RBA surprisingly remains on hold

The RBA during today’s Asian session remained surprisingly on hold, despite market expectations of the bank hiking by 25 basis points, citing that they need “some time to assess the impact of the increase in interest rate”. Yet, the bank noted that inflation still remains high and that some further tightening may be required in the future. During yesterday’s American session, we note the US ISM Manufacturing PMI figures for June, coming in lower than anticipated by market analysts. The lower-than-expected figures, highlighted market worries of the US economy entering a recession in the near future, due to the aggressive interest policy imposed by the Fed. In the US Equities markets, we note that EV Manufacturer Rivian announced that they will be expanding deliveries of their Electric Delivery Van’s to Europe, for their client Amazon (#AMZN). According to Bloomberg, the company will roll-out approximately 300 EDV’s in the upcoming weeks, including Munich, Dusseldorf and Berlin. In the commodities market, we highlight the announcement by Saudi Arabia that they will extend by 1-month their oil production cut , in an attempt to drum up oil prices. However, we note that Indian refineries have announced that they will be paying for Russian oil using the Chinese Yuan. Such a move could potentially help Russia evade sanctions, it could even undermine OPEC’s attempts to reduce oil production, as Russia could now continue pumping oil into the market via India, as an intermediary. On a more global geopolitical matter, we note the continued deterioration between US-China relationships, following recent announcements by China that they would be controlling the number of exports of some metals that are widely used for the construction of semi-conductors. In an apparent retaliatory measure, the US announced earlier today, that it would be restricting China’s access to cloud computing services. According to a report by Reuters, companies such as Amazon (#AMZN) and Microsoft (#MSFT) would require US Government approval before providing access to cloud-computing services that use advanced AI chips to Chinese customers. Such a scenario in the long run, could hinder the US efforts to vastly improve domestic chip production.

AUD/USD appears to be moving in a sideways fashion, following the RBA’s surprise decision to remain on hold during today’s monetary policy meeting. We maintain a neutral outlook for the pair, as long as the price action remains between the boundaries of support at 0.6620 (S1) and resistance at the 0.6700 (R1) level. Further supporting our case is the RSI indicator below our 4-Hour chart which currently registers a figure of 50 , implying a neutral market sentiment. For a bullish outlook, we would like to see a clear break above the 0.6700 (R1) resistance level, with the next possible target for the bulls being the 0.6770 (R2) resistance level. On the other hand, for a bearish outlook, we would like to see a clear break below support at 0.6620 (S1), with the next possible target for the bears being the 0.6555 (S2) support base.

XAU/USD appears to be moving in an upwards fashion, following heightened global recession fears. We maintain a bullish outlook for the precious metal and supporting our case is the upwards moving trendline incepted on the 29 of June, in addition to the RSI indicator below our 4-Hour chart moving towards the 70 figure, implying a bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 1932 (R1) resistance level, with the next possible target for the bulls being the 1955 (R2) resistance ceiling. On the other hand, for a bearish outlook we would like to see a clear break below the 1910 (S1) support level, with the next possible targets for the bears being the 1886 (S2) support base.

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In today’s European session, we note the release of Switzerland’s CPI rates for June, Germany’s and the UK final Manufacturing PMI figures for the same month and in the American session the US ISM Manufacturing PMI figure for June.