The RBA is about to drop its monetary policy decision!
Will the event help AUD/CHF extend its downtrend?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOJ reportedly bought about 300B JPY (2B USD) worth of bonds in an unscheduled operation after Japanese bond yields temporarily surged to 0.605%, the highest since June 2014
Japan’s industrial production rebounded by 2.0% m/m in June (vs. 2.5% expected, -2.2% in May) led by cars and electronic devices
Japan’s retail sales grew by 5.9% y/y in June (vs. 5.4% expected, 5.8% in May); monthly retail trade is down by 0.4% (vs. 0.2% expected, 1.4% gain in May)
Melbourne Institute’s inflation gauge showed 0.8% price acceleration in July, much higher than June’s 0.1% uptick
ANZ’s business outlook survey showed that a net of 13.1% respondents expected the New Zealand economy to get worse in July, an improvement of 5 points from June
China’s official manufacturing PMI improved from 49.0 to 49.3 in July, while the services PMI dropped from 53.2 to 51.5 on lower construction activity
Japan’s consumer confidence improved from 36.2 to 37.1 in July
Japan’s Housing Starts drop -4.8% y/y in June (vs. -0.2% expected) after a 3.5% uptick in May
Price Action News
The yen was the biggest mover and loser during the Asian and early European trading as word got around that the Bank of Japan (BOJ) stepped in the bond markets and bought $2 billion worth of Japanese government bonds after its 10-year yields hit 0.605% – the highest since June 2014 – earlier today.
Lower bond yields lessen the appeal to buy bonds, which could limit JPY’s gains.
The yen traded within its Friday U.S. session ranges before moving almost steadily against most of its major counterparts.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone CPI flash estimate at 9:00 am GMT
Eurozone preliminary GDP at 9:00 am GMT
U.K.’s BRC shop price index at 11:01 pm GMT
Japan’s unemployment rate at 11:30 pm GMT
Australia’s building approvals at 1:30 am GMT (Aug 1)
China’s Caixin manufacturing PMI at 1:45 am GMT (Aug 1)
RBA’s policy decision at 4:30 am GMT (Aug 1)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/CHF: 15-min
Who’s ready to trade the Reserve Bank of Australia (RBA)’s policy decision?
If you’re still looking for a setup, then you might want to check out AUD/CHF’s downtrend on the 15-minute time frame.
AUD/CHF’s prices are near the .5850 minor psychological area, which is not far from a trend line resistance and today’s S1 (.6840) Pivot Point levels.
If the European session’s risk aversion spills over to the Asian session, or if the RBA keeps its rates unchanged when at least some traders had expected a rate hike, then AUD will have a hard time sustaining its Monday upswing.
AUD/CHF could turn lower from its current levels and revisit previous inflection points like .5800 or the .5780 low.
Watch AUD/CHF’s price action closely to see if the pair would extend its downtrend in the next trading sessions!
