Global macro overview for 05/02/2016:
In its recent monetary policy statement, the Reserve Bank of Australia expressed concern about the domestic economy in the light of the global financial turmoil. The main concern for the RBA is still the uncertain situation in China, which is Australia's biggest trade partner. Moreover, the other problem was seen in the mining sector, but here the RBA governor was more optimistic mainly due to a robust demand for jobs in that sector. At the end, the RBA made no significant changes to its prediction for the GDP growth from its November statement, expecting the domestic economy to grow at an average pace of 2.5% in 2016 and 3% in 2017. In conclusion, the statement was made on more positive note than the last one, despite all the concerns expressed. Nevertheless, in my opinion, the situation in Australia is highly fragile as any stronger headwind in China will call for firmer actions than the current wait-and-see mode.
The technical picture of AUD/USD currency pair still looks more bullish in the H4 time frame chart. The pair managed to break above the 61%Fibo level and topped the level of 0.7242 before it was capped. It is still trading inside a golden channel and only a breakout below the level of 0.7000 would change the current bias from bullish to bearish.