FOMC July meeting minutes open the door for future rate hikes

In Yesterday’s American session the FOMC July meeting minutes, indicated that “most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy”, implying that the bank may continue its in rate hiking path. Yet two officials favored leaving rates unchanged, potentially hinting at some signs of dissent in the FOMC. In the American session, the US Industrial production rates send out mixed signals, with the mom rate exceeding expectations whilst on a yoy basis the rate came in lower than expected. Interestingly the US Preliminary Building permits figure for July came in lower than expected, which could indicate a slowing demand for the housing industry and as such could potentially spell trouble for the US manufacturing industry in the long run.GoldmanSachs might be facing an internal power struggle based on an article by Bloomberg, where in the event that the perceived internal conflicts spill into the public eye, we may see a negative impact on the share price of GoldmanSach’s  (#GS). In the commodities market, Gold breaks below the $1900 key psychological level and Oil breaks below the $80 key psychological level following continued worries about China’s economy recovery and by extension the potential demand for oil from the world’s largest importer of the liquid gold. In the US equities markets, we note that the State of Texas approved plans to require companies to include Tesla’s EV charging technology in EV charging stations in order to be eligible for federal funds, according to a Reuters report. Lastly, we note that Walmart’s (#WMT) earning’s are due to be released today.

AUD/USD appears to be moving in a downwards fashion, with the pair now appearing to be aiming for the 0.6390 (S1) support level. We maintain a bearish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart which is currently near the figure of 30, implying a strong bearish market sentiment, in addition to the downwards moving channel formed on the 10^a. of August. For our bearish outlook to continue we would like to see a clear break below the 0.6390 (S1)  support level and a move towards the 0.6290 (S2) support base. On the other hand, for a bullish outlook, we would like to see a clear break above the 0.6470 (R1) with the next possible target for the bulls being the 0.6585 (R2) resistance ceiling.

US500 appears to be moving in a downwards fashion, with the index now appearing to be testing support at the 4400 (S1) support level. We maintain a bearish outlook and supporting our case is the RSI indicator below our Daily chart which is currently moving towards the 30 level, implying a bearish market sentiment, in addition to the downwards moving trendline formed on the 1^a. of August. For our bearish outlook to continue, we would like to see a clear break below the 4400 (S1) support level if not breaking the 4270 (S2) support level as well. The next potential target for the bears could be the 4140 (S3) support base. On the other hand, for a bullish outlook, we would like to see a clear break above the 4490 (R1) resistance level, with the next possible target for the bulls being the 4595 (R2) resistance level.

Other highlights for the day:

In today’s  American session, we highlight in the US the weekly initial jobless claims figure and the Philly Fed Business index figure for August. In Tomorrow’s Asian session, we highlight Japan’s Core CPI rate for July. On a monetary level we highlight Norway’s interest rate decision, which is due out in Today’s European session.

#AUD/USD H4 Chart

Support: 0.6390(S1), 0.6290 (S2), 0.6205 (S3)

Resistance: 0.6470 (R1), 0.6585 (R2), 0.6715 (R3)

#US500 Daily Chart

Support: 4400 (S1), 4270 (S2), 4140 (S3)

Resistance: 4490 (R1), 4595 (R2) 4730 (R3)

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