RBA (Reserve Bank of Australia) holds the cash rate target and the three-year yield target at %0.10 this morning. In the last meeting, RBA cut the rates to this level and unleashed a new round of stimulus. This time however RBA stayed steady.
In the statement, Governor Philip Lowe said that economy will need significant gains in employment and a tighter labor market to reach %2-3 inflation target. Also, the board of reserve bank doesn’t expect to increase the rate for at least three years. The board will keep the size of the bond purchase program under review constantly and act more if necessary. AUDUSD reacted well to this news and it is up nearly %0.20.
AUDUSD is currently testing 0.7376 resistance and these tests going on for a week now. If the price break this resistance upward move may continue to the medium-term target of 0.8150.
If the price reverse from below 0.7376 or 0.75 resistances, 0.7195 – 0.6980 levels can be followed as support.
In the shorter-term, a bullish trend channel is active at the moment between 0.7315 and 0.7415. In this channel, the price is moving between a tighter range of 0.7341-0.7377(which is also the resistance from the daily chart).
You can check our earlier analysis in here.