Daily Briefing, May 7 – Trade Setups in AUD/USD & XAU/USD
Arslan Butt • 2 min read
The session has begun with RBA Cash Rate & Rate Statment. Despite a significant level of cash rate cut forecast by Reserve Bank of Australia, RBA left the interest rates on hold today. Cash rate target remains on hold at a record low 1.5% for the 30th meeting. while the markets had priced in a greater-than-70 % odds of rates cut.
RBA Statment Key Takeaways:
As per the statement, the RBA is looking for further declines in unemployment or underemployment to boost inflation. Otherwise, it may cut rates.
The record-low cash rate of 1.5% has been at that level since the last movement in August 2016, although market analysts aren’t expecting it to stay there much longer.
AUD/USD – Bearish Trendline Breakout
- As a result of hawkish RBA, the Aussie has made a solid bullish move, causing a bullish breakout of 0.7010 resistance level.
- Another important thing is that AUD/USD has filled the bearish gap at 0.7020, signaling further room for buying.
- The recent 4-hour candle is bullish engulfing, which signifies further buying until the next resistance area of 0.7065.
- On the lower side, support continues to fall around 0.7015 today.
Key Trading Level: 0.7012
AUD/USD – Trade Plan
Traders, consider staying bullish above 0.7010 with a stop loss below 0.6980 and take profit around 0.7070.
GOLD – XAU/USD – Trading Sideways Market
The precious metal gold continues to trade higher around 1,282 over safe-haven appeal and weakness in the Greenback. On Tuesday, the dollar hovered near a five-week low against the Yen over US-China trade tensions which aroused concerns about the outlook for global growth.
Gold continues to trade sideways, maintaining a narrow trading range of 1,285 – 1,276. Technically speaking, gold is facing strong resistance around 1,285. The RSI is testing 80 levels, signaling the potential for a bearish retracement.
The bullish breakout of 1,285 can extend gold’s bullish rally until 1,291. While gold can drop until 1,271 on the bearish breakout of 1,276 level.
Key Trading Level: 1276.69
Gold – XAU/USD – Trade Plan
Consider selling below 1,285 with a stop loss above 1,288 and take profit of 1,276. Buying is recommended above 1,276 today.