Markets started to gain pace on Tuesday after rather quiet Monday’s afternoon trading, due to US holiday. The US dollar started day at back foot against major counterparts, with dollar-bears accelerating in early European trading.
Reserve Bank of Australia kept interest rates unchanged on September policy meeting, after rate cut to a record low at 1.5% in August. The decision was widely expected as central bank’s board saw no significant changes in the economy, however, the question of further easing was left open. Recent rate cuts were driven mainly by sharp slowdown in inflation, as the central bank wanted to prevent Australian dollar from stronger rallies, in reaction of aggressive policy easing elsewhere in the world.
The G20 meeting, gathering of leaders from world top economies, ended yesterday. Leaders broadly agreed to coordinate macroeconomic policies, with proposals to meet growing challenges to globalization and free trade.
Chinese President Xi Jinping urged major economies to drive growth through innovation, nut just fiscal and monetary measures.
On the sidelines of the summit, talks between USA and Russia for a ceasefire in Syria failed.
The US dollar was lower in Early European trading. The Euro hit session high at 1.1168, while Sterling surged to 1.3350 high, recovering part of pullback from Monday’s high at 1.3373.
The dollar fell against yen to a session low at 103.24, after hitting high at 103.79 in Asia.
Australian dollar rallied to a session high at 0.7652, supported by central bank’s decision to keep interest rates unchanged on Tuesday’s meeting.
Spot Gold holds near fresh recovery highs, driven by weaker dollar, while Crude oil is in defensive in early Tuesday’s trading, retracing Monday’s strong rally, as lack of no immediate action after Russia and Saudi Arabia signed pact on cooperation in stabilizing the oil market.

Highlights of the day

Asia

RBA’s rate decision was the top event of Asian session. Australian central bank stayed pat at today’s meeting, keeping interest rates unchanged at 1.50%, following August cut by 0.25% to a record low.
Europe
The Eurozone’s recovery lost traction in the second quarter of the year as GDP expanded at the slowest pace seen in two years, according to ‘flash’ data released last month. Growth came in at 0.3% over the previous quarter, half of the first quarter’s 0.6% increase with the result likely influenced by transitory factors – such as the early timing of Easter and a mild winter – which had boosted the first-quarter’s result. Data is due at 09:00 GMT.
European Central Bank President Draghi will be looking at the make-up of the data closely ahead of this Thursday’s ECB meeting and press conference.
America
Release of US non-Manufacturing PMI for August is due at 14:00 GMT, with forecast at 55.4 vs 55.5 in July. This will hopefully be a better print than last Thursday’s manufacturing ISM, which fell to 49.4 from 52.6 in July with the new orders component slumping to 49.1 from a prior 56.9. A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.
Important levels

EURUSD
The Euro holds near yesterday’s marginally lower low at 1.1138, after two days in red. Near-term focus stays at strong support and breakpoint zone at 1.1126/22, loss of which would trigger fresh bearish acceleration towards 1.1100 and 1.1045 in extension.
Immediate barriers lay at 1.1168 (session high / daily cloud top) and yesterday’s high at 1.1181. Sustained break here is needed to ease immediate downside pressure and open way for recovery towards 1.1205/30 pivots.

GBPUSD
Cable is regaining traction after Monday’s Doji that came after upside rejection at 1.3373 and subsequent pullback that found ground at 1.3286. Overall structure remains positive, however, the pair may spend some time in extended consolidation, before final break through cracked key resistance at 1.3369 which would open way towards next breakpoints at 1.3478 and 1.3531.
Monday’s low at 1.3286 marks initial support, followed by 1.3242, 1.3215 and 1.3178 pivot.

USDJPY
The pair is at the back foot, following Monday’s close in red, after the rally peaked at 104.30, capped by daily cloud base. Initial supports at 103.00/102.78 hold for now, but technical studies signal possible stronger correction. Loss of 102.78 pivot would open 102.47 and 101.90 in extension.
Resistance levels lay at 104.30/43, with break here to open upper pivot at 105.20 (daily cloud top).
US Crude Oil
Oil pulls back from Mond

ay’s recovery high at $46.52, after falling to clear layers of strong technical resistances. Renewed selling pressure was signaled by Monday’s daily candle with long upper shadow, with the top of descending daily cloud, capping upside attempts for now.
Pivotal near-term support/resistance levels lay at $44.29 and $45.72, with break of either side, required to signal near-term direction., Market Analysis