Global macro overview for 02/02/2016:
Last night, the Reserve Bank of Australia decided to maintain the official cash rate at the level of 2%. It is now the eighth consecutive month with no changes in the regulator's monetary policy. The RBA expressed concerns about low market volatility and low inflationary pressures. The inflation growth rate in the year 2015 hit the levels of 1.5% - 1.7% oscillating near the lower end of the RBA's projected range of 2%-3%. To make a conclusion, the RBA remains in the wait-and-see mode now to monitor impact of the recent global financial markets turmoil and slowdowns in China's economy on the Australian economy.
From the technical point of view, the AUD/USD pair managed to retrace 61% of the previous downward swing and now it is expected to reverse from that level. Currently, it is trading at the double support level: horizontal support is found at the level of 0.7041 and dynamic support provided by golden trend line. Any breakout below this important support will confirm our downward bias.