Forex Signals Brief, May 7: RBA Cash Rate & Rate Statement in Focus
Arslan Butt • 2 min read
On Tuesday, the Greenback hovered near a five-week low against the Yen after concerns about the US-China trade tensions rekindled worries about the forecast for global growth. The global financial markets opened with a massive gap as investors felt uncertain over ongoing fundamentals. Well, all the drama started with Trump’s warnings regarding the trade war and tariff hike.
On Sunday, Trump intensified pressure on China to reach a trade agreement by stating he will raise the US tariffs on $200 billion worth of Chinese products this week. Besides, Trump also aims to target hundreds of billions of Chinese goods more soon.
Reserve Bank Interest Rates
RBA leaves the cash rate on hold at 1.5%. There has not been any change to the cash rate since August 2016 when it was cut by 25 basis points to its current record low of 1.5%. We see a massive buying in Aussie as a higher interest rate of 1.5% is keeping it expensive for borrowers, thus limiting its supply in the market.
Forex Signal Update
The market continued to trade in the state of panic. Which is why team FX Leaders avoided opening unnecessary forex trading signals. However, our position in AUD/USD and GBP/JPY brought us green pips on Monday.
USD/JPY – Get Ready Signal
Team FX Leaders was looking to open a buy position in the USD/JPY but the safe haven appeal continued to dominate the market. In fact, the pair made a slight correction, but the gap is still unfilled. The USD/JPY is heading upward to test the descending channel’s resistance at 110.740. Bullish crossover of this level can trigger buying until 111.180. So let’s wait and see as we already have a get ready signal for USD/JPY.
USD/JPY – 2 Hour Chart
On Monday, the BTC/USD signal was closed due to some technical error, but our IT team managed to put it back online. The market sentiment seems to reverse as they believe that Bitcoin (BTC) may be poised for a correction. On Friday, BTC made a bullish crossover at $5,765 to place a high around $6,200 but continued to stay below this level.
But earlier today, the BTC/USD has made a bullish crossover above $6,200 resistance level. The leading cryptocurrency is now heading towards placing new highs which aren’t in our favor. However, the pair may find resistance around $6,500 today. On the lower side, support prevails around $6,100 and $5,700.