Daily Briefing, May 7 – Trade Setups in AUD/USD & XAU/USD - Forex News by FX Leaders

Daily Briefing, May 7 – Trade Setups in AUD/USD & XAU/USD

Posted Tuesday, May 7, 2019 by
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.

 

Support  Resistance
0.6997      0.7038
0.6971      0.7052
0.693       0.7093
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.

Support    Resistance
1270.75        1284.84
1262.6          1290.78
1248.51        1304.87
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.

Good luck!

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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