Risk sentiment rises, RBA hikes rates
AUD/USD => The pair slips towards 0.6850
BTC/USD => The crypto rises over 20k
EU Stoxx 50 => The pair holds above 0.68
AUD/USD falls after RBA rate hike
AUD/USD gained 0.7% in the previous session after the Aussie found support from higher-than-expected job advertisements and the upbeat market mood.
Meanwhile, the USD was out of favour in holiday-thinned trade. Today the pair is edging lower after the RBA raised interest rates by 0.5%, the second straight 0.5% rate hike and in line with expectations provoking a buy the rumour sell the fact reaction. The OCR has risen from 0.85% to 1.35%. Looking ahead US factory orders will be in focus and are expected to tick higher in May.
| US factory orders | Expected: 0.5% (0.2%) | Previous: 0.3% |
Where next for the AUDUSD?
AUD/USD has risen off the 0.6765 July low, but the move higher appears to be corrective, with further gains questionable.
The pair trades well below the bearish 20 sma and technical indicators remain bearish. Sellers will look for a move below 0.6765 to extend the bearish trend towards 0.6750 the November 2019 low and 0.67 round number. Buyers need a move over 0.6970 to create a higher high and expose the 50 sma at 0.7030
BTC/USD rises as sentiment improves but troubles remain
BTC/USD is on the rise for the third straight session and has pushed back above 20k, regaining ground lost in last week’s downturn.
Bitcoin is up over 5% in the past 24 hours rising from below 19k at one point. The move higher has coincided with improving risk sentiment in the broader financial market and is being reflected across the crypto space. Despite the move higher, BTCUSD is still off around 5% from last week’s highs, failing so far to build a higher high.
The market will look for signs of passing peak inflation and indications that a recession will be avoided before the price rises meaningfully. The crisis within crypto firms also rumbles on after Three Arrows Capital filed for bankruptcy, Celsuis laid off 150 employees and CoinLoan has limited the size of withdrawals.
EU Stoxx 50 rises ahead of PMI data
Euro Stoxx 50 closed 0.1% higher in the previous session, a small rebound after steep losses last week.
The index pushed higher after wholesale inflation eased by more than expected and despite eurozone investor confidence plunging to its lowest level since the pandemic hit in May 2020. Today the index is extending gains as risk aversion continues to improve following upbeat data from China overnight.
The service sector activity expanded at the fastest pace in 10 years. Attention now turns to Eurozone composite PMI data, which is expected to confirm the preliminary reading, marking a significant slowdown in activity.
| EZ Composite PMI | Expected: 51.9 (3.9) | Previous: 54.8 |
Support can be found at 3400 (June low) and 3310 (October high).
Resistance for the pair can be seen at 3510 (20 sma) and 3600 (June 27 high).
