AUD/USD: No Surprise From RBA

No Surprise From RBA

During the Asian trading session, we had the Reserve Bank of Australia meeting coming out with their decision on the interest rate. As expected, the rate stayed the same as previously at 1.50%. This is the lowest the rate has been historically since it was last changed in August 2016, and the RBA is in no rush to raise interest rates yet.

There has been a recent slight increase in the unemployment rate, going from 5.50% to 5.60%, even though it is still considerably low compared to the last couple of years. The RBA will probably wait to raise the rate until they are certain the wage growth has picked up and inflation has got into their target range of 2-3 (%).

Some economists believe that the increase in Australia’s cash rate could be delayed till the 4th quarter of 2018. Some sceptics argue that the rate won’t get a boost this year. Their projections are for the second half of 2019, due to current inflationary pressures.

AUD/USD – Technical Outlook

AUD/USD had a good selling day yesterday, fuelled by the US-China trade tensions. The pair dropped around 50 pips on the day, but the activity that we are seeing this morning is totally the opposite. The pair seems to be gaining strength again, recovering all the losses from yesterday.

For now, AUD/USD looks strong and we might see a bit more continuation to the upside. The fact that the pair decided not to go and test the bottom side of the channel again and reversed straight to the upside, could be seen as a bullish indication that could push the price slightly higher.

A break and a move above the 0.77100 level could open the path back to previous highs. The next key resistance area could be the 0.77600 area. But if that would not hold, then the 0.77860 level could be seen as the other possible area for AUD/USD to test.

Alternatively, if we see the pair moving back down below the 0.76700 level, then we could expect to see a bit of negativity coming into AUD/USD again, which could open the path towards the recent low of 0.76400.

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