MPC members vote will we see a shift in rate thinking

The Aussie finally broke through the 0.9400 level yesterday and has continued higher after CPI data came in as expected. With revisions higher from the previous reading, however, this has turned out to be the key driver here. The Aussie is  now trading around 0.9430 and will be looking at the Kiwi rate decision later tonight, which could have an impact on the Aussie if any surprises happen. As it stands the consensus is that the RBNZ will raise the rate by a quarter per cent to 3.5%. The last three rate announcements have seen rates rise, the same as expected. Today is keeping it at a steady increase, making it the highest interest rate for developed countries. NZD/USD is trading slightly higher today at 0.8680, with a possible chance to see it going back to its highs above 0.8800.

The euro finally broke a big support level of 1.3500, triggering stops and pushing it down now to 1.3570. A downward trend looks to be set in. With the recent risk off sentiment, geopolitical tensions are not helping. The euro could struggle today with little data out to support it and new lows of the year already reached yesterday. It all is a waiting game of figures relating to inflation and ECB comments.

The pound is still very much in a tight range this week, between 1.7040 and 1.7099, with geopolitical tensions keeping most markets in consolidation. The MPC official bank rate votes and asset purchases are published, expected to be 0-0-9 for both, but there is concern out there that Carney is losing his grip on the members and we could start to see some breakaways from the suite calling for a rate rise. It seems to be the next action to be taken, following in the footsteps of the RBNZ. If we see a shift in thinking from the voters, it could give the pound back its bid tone and result in a break out of the tight range we are currently seeing, with maybe a break above the 1.7100 level.

AUD/USD

Supports 0.9361 0.9356 0.9336 | Resistance 0.9423 0.9459 0.9499

EUR/USD

Supports 1.3459 1.3436 1.3399 | Resistance 1.3519 1.3530 1.3549

GBP/USD

Supports 1.7050 1.7037 1.7024 | Resistance 1.7116 1.7143 1.7151