RBA to Remain On Hold; AUD/USD & AUD/CAD Forecasts and Analysis

During the Asian session, the Reserve Bank of Australia will announce its interest rate decision. The central bank is expected to keep on hold its current 1.5% cash rate once again and most probably maintain a neutral tone. The Australian economy revealed a solid growth the fourth quarter of 2016, 2.4% year-over-year from 1.9% before, however, the rise in unemployment rate in February overshadowed the upbeat data. The headline jobless rate picked up unexpectedly to 5.9%, recording the highest level in more than a year raising concerns for the domestic economic growth.



On the other hand, the central bank tries to balance the below-target inflation rate by rising household debt levels, making more difficult to forecast what it will be central bank’s next move. However, if the labour data continue getting worse, RBA will probably consider reducing cash rates and make changes in the housing market to confront the financial stability risks.

AUD/USD Stucks Within an Ascending Formation
The AUD/USD pair consolidates within an ascending triangle since last January 2016 with strong resistance level at 0.7780. There was a very little consistency in the performance of the Australian dollar this past month against the greenback as it ended March virtually unchanged.

Another pullback from the latter level is possible as the price hit it again and is driving the price further down to the 0.7500 strong psychological level which overlaps with the 50-weekly SMA. A break below the aforementioned psychological barrier, it will open the door for a retest of the rising trend line near 0.7300. Otherwise, a successful attempt of 0.7780 to the upside we may see a drop of the commodity pair towards 0.8170 strong resistance handle but it needs to go through the 200-weekly SMA. RSI is approaching its neutral area whilst MACD is flattening above the zero line.


AUD/CAD Rebounded on 4-Month High
The first quarter has come to an end and it was a positive period for the AUD/CAD pair. The Australian dollar surged almost 5% against the Canadian dollar over the last four months and in March it printed a fresh four-month high at 1.0340 resistance barrier. On a medium-term basis, the week before ended near its opening price as the pair failed to surprise and surpass the latter level.

Currently, on the daily chart, the pair is moving slightly lower and slipped below the 1.0250 significant level while it approached the 50 SMA. The initial target is the 1.0020 support obstacle which stands above the 100 and 200 SMAs. On the other side, a run above 1.0250 will expose the price towards the 1.0340 barrier. Technical indicators are endorsing the bearish thought as both are falling. The MACD oscillator is trading lower, below its trigger line and is holding a bit above the zero line. The RSI indicator declined below the 50 level, however, is pointing to the upside.