RBA raises interest rates and more US earnings due

RBA raises interest rates and more US earnings due

AUD/USD => The Aussie rises 1%
BP (US) => The stock trades below 28.50
Starbucks => The stock trades at a 9-month low


AUD/USD jumps post-RBA

After four days of losses, AUD/USD is rising firmly higher on Tuesday after the RBA raised interest rates by 25 basis points to 0.35%.

This marks the first interest rate rise from the Australian central bank since November 2010. The move was expected given that inflation was rising quickly at 5.1% YoY, the highest level since 2001.

Meanwhile, the USD is pausing for breath after a strong rally taking the US Dollar index towards a 20-year high. The USD will now look ahead to factory orders data and job openings data which is expected to show over 11 million vacancies in a tight labour market.  

U.S. ISM manufacturing PMI

U.S. Factory orders March

Actual: 55.4 (1.7)

Expected: 1.1% (1.6%)

Previous: 57.1

Previous: -0.5%

RBA raises interest rates and more US earnings due chart

Where next for the AUD/USD price?

Since early April, AUD/USD has been trending lower, forming a series of lower highs and lower lows.

The price ran into resistance at 0.7035 and has rebounded higher. The rise above 0.7095, combined with the bullish crossover on the MACD, keeps buyers hopeful of further upside.

Buyers will look for a move over 0.7185, the 50 sma ahead of 0.7230 April 26 high. A move above here could create a higher high and open the door to 0. 7290..
Meanwhile, sellers could focus on the 50 SMA crossing below the 100 SMA in a bearish signal. Sellers would look to take out 0.7035 to create a lower low, bringing 0.70, the psychological level, into play and 0.6980, the 2022 low, into target.

BP Q1 earnings preview

BP is due to report Q1 earnings.

After oil prices rose 30% across the first three months of the year and gas prices surged, oil major, BP is expected to report a substantial rise in underlying earnings and cash flow.

Underlying replacement cost profit, which is the industry’s headline earnings measure, is expected to rise 65% YoY to $4.3 billion in Q1—however, impairment charges related to the write-downs from its withdrawal from Russia.

BP is one of the most exposed oil companies to Russia owing to its large stake in Rosneft and has already warned that the write-down could be as much as $25 billion. 

Starbucks Q2 earnings preview

Starbucks is due to report its Q2 financial year results and is expected to post a 14.4% YoY increase in revenue, and adjusted EPS is expected to decline by 2.4% to $0.61.

This would mark the first decline in years and comes as the drinks company comes up against tough comparisons from the previous year. China is a key risk across the quarter as COVID cases picked up and lockdown restrictions were implemented.

The cost of living crisis is the other key concern, with rising costs being passed on to the customer at a time when households are reining in their spending. CEO and President Kevin Johns departed from the company last month, and the search for his replacement continues. 

Support can be found at 69.1 (29 June low) and 65.00 (November high).

Resistance for the stock can be seen at 85.0 (50 sma) and 92.4 (March high).

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