The Dow dropped yesterday after the Federal Reserve made a surprise 50 basis point rate cut. In a statement, Jerome Powell said that the Fed would do its part to provide stability as corona-virus spreads internationally. The main concern among investors is that the Fed slashed rates very soon. Another concern is that the rate cut will not have a major impact because it will not open factories in China. Also, the Fed has now brought rates so low that future cuts will not have a significant impact on the economy.

US futures rose in overnight trading as investors focused on Super Tuesday. Futures tied to the Dow and Nasdaq rose by 350 and 115 points respectively. Early results showed that Joe Biden was winning most states. He won states like Tennessee, Alabama, and Oklahoma. Bernie Sanders won in Utah and Texas. Investors were worried that Bernie Sanders would become the Democratic nominee because of his radical proposals like Medicare for all, raising taxes, and forcing companies to give employees a 20% stake.

The Australian dollar rose today as traders reflected on the RBA’s decision to cut interest rates yesterday. The bank brought interest rates to a record low of 1.25%. The market also received key data from the country today. The final reading of Q4 GDP showed that the economy rose by 0.5%, which was better than the expected growth of 0.3%. The economy grew by an annualized rate of 2.2%, which was better than the previous 1.7%. Looking forward, this growth will likely drop in the first quarter because of Australia’s exposure to China.

AUD/USD

The AUD/USD pair rose to an intraday high of 0.6614, which was slightly lower than yesterday’s high of 0.6643. The price is slightly above the 14-day and 28-day exponential moving average while the RSI has been rising. The pair might continue rising today as it attempts to test the important level of 0.6700.

XAU/USD

The XAU/USD pair rose yesterday after the Fed slashed interest rates. The pair rose to an intraday high of 1652.60, which is the highest level since Thursday last week. The price then started moving sideways as traders reflected on the impact of the rate cut. As a result, the pair is along the 14-day and 28-day exponential moving averages while the RSI has flattened slightly below the overbought level of 70. The pair may breakout in either direction because of the current consolidation price action.

EUR/USD

The EUR/USD pair rose and then pared the gains after the Fed cut interest rates. The pair is now trading at 1.1158, which is slightly lower than yesterday’s high of 1.1214. The price is along the 14-day and 28-day exponential moving averages while the RSI has moved slightly lower. The pair may break out in either direction as traders reflect on the next move by the Fed.