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    RBA keep cash rate on hold - GDP up next

    Keeping rates on hold at 2% was no real surprise to market participants who only priced in 6% chance of a rate change. However the bigger surprise was the lack of change to the statement regarding, well... much at all really. 

    You can read the entire statement here but, the truth is, you may not need bother as there is very little insight into RBA thinking other than the image above. 

    I had been hoping for more insight into their take on China, potential impact on Australian economy or the delay to the FED rate hike. But in the paragraph above I see all I need to know - FED are still on track to raise rates, and that little thing that happened in China recently made stocks volatile. (I.e. nothing to worry about here, let us just wait for the FED to raise rates). 

    With the statement out of the way traders will have to wait for manufacturing data from US tonight and tomorrow for domestic GDP data. Expected to expand a mere 0.4% q/q e do run the risk of downside for the Aussie if it comes in negative. However technically I am seeing potential for an upside surprise for the Dollar.

    Since the near-break of 70c last week, the Aussie has printed 3 bullish reversal patterns, each forming a higher low. This has the hallmarks of a basing pattern to form above 70c and for the Dollar to test 72c this week. A break above 0.72 would be an achievement for bulls who only recently thought we would be breaking to the upper 60s. 

    As long as we remain below 72 then we have to consider a break below 70c, especially when we have Nonfarm payroll from US on Friday. With a market which is feverishly searching clues for a September rate rise then any good data from US is likely to weigh on the Aussie.  

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