RBA rate announcement due and cryptos rise
AUD/USD => The pair edges away from 0,72
Tesla => The stock trades 40% lower this year
BTC/USD => The crypto rises above 31k
AUD/USD awaits RBA decision
AUDUSD rallied 0.6% last week marking a third consecutive week of gains, taking the price to a six-week high.
The Aussie dollar gained ground, boosted by the re-opening of Shanghai after two straight months of COVID lockdown restrictions and ahead of the RBA interest rate decision. Data from China overnight highlighted the impact that the lockdown has had on the Chinese economy with the service sector in contraction and lagging behind the manufacturing sector.
Meanwhile, the Australian job advertisement index unexpectedly rose in May after falling last month. Attention will now turn to the RBA which is expected to hike rates by 25 bp from 0.35% to 0.6%. However, with inflation at a 3-decade high some are saying that a larger hike is needed. A more hawkish RBA could boost the AUD.
| China services PMI
Aus. Job advertisements |
Actual: 41.4 (5.2)
Actual: 0.4% (2.4) |
Previous: 36.2
Previous: -2% |
Where next for AUD/USD?
AUD/USD has rebounded from 0.6830 the May 12 low, trading in a rising channel.
The price recaptured the 50 sma and ran into resistance around the 200 sma at 0.7258, closing last week just below this key level. The 50 sma has crossed below the 200 sma in a bearish signal and the price has fallen below the 50 sma as it opened today finding support from the lower band of the rising channel at 0.7185. It would take a move below 0.7145 to create a lower low.
On the flip side, the RSI remains in bullish territory, buyers will need to push over the 50sma at 0.7220 & 200 sma at 0.7258 to bring 0.7314 the January 13 high, and the upper band of the rising trendline into play. A break above here opens the door to 0.7380 the April 22 high.
Tesla tumbled 9% on Friday. Here’s why.
Tesla tanked over 9% on Friday and is set to decline further today after Chief Executive Elon Musk is reportedly looking to cut 10% of salaried staff and freeze hiring amid growing concerns over the health of the US economy.
Whilst Friday’s non-farm payroll report was actually stronger than expected in May, with 390k jobs added, should Musk’s concerns be reflected across corporate America then the jobs market could quickly deteriorate. Musk, in addition to saying that he had a bad feeling about the health of the economy, has also insisted that remote working is no longer acceptable.
Tesla lost over 30% of its value across Aril and May as the Shanghai factory temporarily closed due to COVID restrictions and amid growing fears of a global slowdown in economic growth.
Bitcoin’s selloff steadies, for now.
Bitcoin managed to book a 2.8% rise last week stabilizing after eight weeks of decline, which saw the cryptocurrency drop over 35%.
BTC/USD is rising further today but the bigger picture shows that the crypto is still in consolidation mode struggling around the 30k level Bitcoin shows few signs of a strong rebound. It would take a decisive break above 32k for the crypto to break out of its current trading range and for the bulls to push the price higher.
Interestingly BTC/USD managed to rise over the weekend despite the sell-off in stocks after the better-than-expected non-farm payroll. The has been a strong correlation between digital assets and stocks in recent months as the markets attempt to decipher the Fe’s next moves and the health of the US economy.
Support can be found at 28K ( May 26 low) and 25,400 (May 12 low).
Resistance for the pair can be seen at 32,375 (May 31 high) and 33,750 (50 sna).
