AUD/USD sees little action after RBA maintained status quo
- RBA kept rates unchanged as expected, statement sticks to the script.
- AUD/USD keeps gains but sees little action after RBA decision.
The Reserve Bank of Australia (RBA) kept rates unchanged as expected and the policy statement offered no hawkish or dovish surprise. Thus, the Aussie dollar has hardly moved following the rate decision and continues to trade on the front foot at 0.7790, courtesy of the risk reset in the financial markets.
Key points from RBA statement
- The low interest rate continues to support the Australian economy.
- Appreciating exchange rate could slow economic activity and inflation.
- Sees inflation pickup up gradually as the economy strengthens, Australian economy to grow faster in 2018 than in 2017.
- Sees growth in exports to resume after temporary weakness.
The focus now shifts to RBA governor Lowe's speech scheduled at 21:35 GMT. Also, the currency pair is at the mercy of the market's appetite for the US dollar.
AUD/USD Technical Levels
A daily close above the descending 10-day moving average (now seen at 0.7795 would mean the sell-off from the Jan. 26 high of 0.8136 has made a temporary low of 0.7712 on Mar. 3 and could yield a sustained rally to 0.7891 (50-day MA), above which a major hurdle is seen at 0.7989.
On the downside, a daily close below 0.7744 (61.8% Fib retracement of Dec-Jan rally) risks stronger sell-off to 0.7625 (Oct. 27 low). A violation there would expose 0.7501 (December low).