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MARKET BRIEFING – LONDON OPEN 06.10.2015
The Reserve Bank of Australia this morning hosted its monthly policy meeting. The outcome of the meeting was the decision by the RBA to keep its benchmark cash rate on at 2% for the sixth straight month in succession.
This inaction was widely expected, especially as last month’s decision by the United States Federal Reserve to keep their own Fed Funds rate on hold was reinforced by a very soft Jobs Report which took many market participants and commentators by surprise.
The Reserve Bank of Australia now has a window of opportunity to be patient whilst it gauges the effect of its recent policy of monetary easing. Especially as it seems unlikely that a US rate hike will not happen during the FOMC’s October or December meetings with the markets now pricing in an initial rate increase for March 2016.
The Reserve Bank of Australia, in its statement, cited internal factors as being a key reason why the central bank declined to choose a path of further easing by pointed to a better than expected economic outlook.
There will further news from other central banks tomorrow. The trading day starts early on Wednesday with the Bank of Japan issuing its monthly Bank of Japan Report.
This is followed by news from London when we expect to see no change to the Official Bank Rate which currently stands at 0.50%.
However, traders and investors will be anxious to see if there is a shift in the prior month’s committee member bias. In September, the dovish sentiment won the day with the vote strongly in favour in keeping the rates unchanged with a majority of 8 to 1.
The way the members vote is not the whole story. The Bank of England Monetary Policy Statement should give us an insight on the current strength or weakness in the dovish bias. Furthermore, the markets will be looking for any references to the United States and more specifically, the Federal Reserve’s stance on interest rates and last week’s poor Jobs Report.
EURUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.1295
Target 2: 1.1065
Projected range in ATR’s: 0.0116
Daily control level: 1.1145
GBPUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.5250
Target 2: 1.5030
Projected range in ATR’s: 0.0108
Daily control level: 1.5105
USDJPY
The intraday technical outlook
Trend 1 hour: Up
Target 1: 121.45
Target 2: 119.45
Projected range in ATR’s: 0.99
Daily control level: 118.65
USDCHF
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.9845
Target 2: 0.9660
Projected range in ATR’s: 0.0093
Daily control level: 0.9795
USDCAD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.3190
Target 2: 1.2975
Projected range in ATR’s: 0.0107
Daily control level: 1.3250
AUDUSD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.7165
Target 2: 0.6970
Projected range in ATR’s: 0.0085
Daily control level: 0.7050
GOLD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1150.00
Target 2: 1120.00
Projected range in ATR’s: 15.61
Daily control level: 1129.00
OIL
The intraday technical outlook
Trend 1 hour: Up
Target 1: 48.00
Target 2: 45.00
Projected range in ATR’s: 0.0070
Daily control level: 44.20
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