Daily Outlook

The Australian Dollar is in focus this week as anticipation over whether the Reserve Bank of Australia will cut tomorrow remains a key moot point. Market is factoring in 52% chance of a cut with analysts and economists also split on the decision. Whether the negative Q1 CPI print is enough for the RBA to cut is the question. Confirmation of deteriorating outlook with another local data turning south is likely to be required by the RBA before cutting rates. Last GDP data beats expectation with 3% growth year to year, with unemployment rate low at 5.7% shows strength in the local economy despite the mining and global trade slowdown. After the RBA, Annual Government Budget is to be released, with Retail Sales, Trade Balance on Thursday, making it a busy week for the Australia Dollar.

Gold/USD broke 2016 highs to above $1290, with Gold against the AUD rising by $100 or 6% last week to $1700. The precious metal is growingly seen as an attractive store of wealth in a negative interest rate policy environment where cash or bonds can yield negative and also insurance for uncertainty in global markets. Gold will remain supported as central banks maintain their easing bias and investors seek out alternative assets.

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Trade AUD/USD Intraday: the downside prevails. Pivot: 0.7685 Our preference: short positions below 0.7685 with targets @ 0.7575 & 0.7545 in extension. Alternative scenario: above 0.7685 look for further upside with 0.7725 & 0.7765 as targets. Comment: as long as 0.7685 is resistance, likely decline to 0.7575. Supports and resistances: 0.7765 0.7725 0.7685 0.7604 Last 0.7575 0.7545 0.7525

Trade Gold spot Intraday: further advance. Pivot: 1281.00 Our preference: long positions above 1281.00 with targets @ 1298.50 & 1304.00 in extension. Alternative scenario: below 1281.00 look for further downside with 1270.00 & 1260.00 as targets. Comment: the RSI is mixed to bullish. Supports and resistances: 1310.00 1304.00 1298.50 1293.11 Last 1281.00 1270.00 1260.00

Trade AUD/JPY Intraday: under pressure. Pivot: 82.96 Our preference: short positions below 82.96 with targets @ 80.64 & 80.35 in extension. Alternative scenario: above 82.96 look for further upside with 84.28 & 85.24 as targets. Comment: the RSI is bearish and calls for further downside. Supports and resistances: 85.24 84.28 82.96 81.03 Last 80.64 80.35 79.80