AUD/USD to Eye Fresh 2018-Lows on Wait-and-See RBA

Reserve Bank of Australia (RBA) to Hold Cash Rate during Record-Low of 1.50%. Will Governor Philip Lowe and Co. Continue to Tame Bets for a Rate-Hike in 2018?

AUD/USD Remains Under Pressure in April, Sits Near 2018-Low (0.7643). Relative Strength Index (RSI) Preserves Bearish Formation from Late-2017.

Trading a News: Reserve Bank of Australia (RBA) Interest Rate Decision

DailyFX Calendar

The Reserve Bank of Australia (RBA) seductiveness rate preference might keep AUD/USD underneath vigour as a executive bank stays in no rush to lift a money rate off of a record-low.

The RBA might hang to a stream book as ‘inflation stays low, with both CPI and underlying acceleration running a small subsequent 2 per cent,’ and a executive bank might merely try to buy some-more time as ‘household incomes are flourishing solemnly and debt levels are high.’ As a result, some-more of a same from Governor Philip Lowe Co. might teach a bearish opinion for a internal banking as a dampens bets for a rate-hike in 2018.

At a same time, an astonishing change in a financial process opinion might worsen a seductiveness of a Australian dollar as marketplace participants ready a for aloft borrowing-costs, and a collection of hawkish tongue might trigger a bullish greeting in AUD/USD as a executive bank prepares to normalize financial policy.

Impact that RBA rate preference has had on AUD/USD during a prior meeting

March 2018 Reserve Bank of Australia (RBA) Interest Rate Decision

AUD/USD 5-Minute Chart

AUD/USD to Eye Fresh 2018-Lows on Wait-and-See RBA

The Reserve Bank of Australia (RBA) kept a money rate during a record-low of 1.50% in February, with a executive bank mostly endorsing a wait-and-see proceed for financial process as ‘inflation is approaching to sojourn low for some time, reflecting low enlargement in work costs and clever foe in retailing.’ The process matter suggests a RBA will hang to a sidelines via a first-half of a year as ‘the low turn of seductiveness rates is stability to support a Australian economy,’ and Governor Philip Lowe and Co. might continue to tame expectations for a rate-hike as ‘an appreciating sell rate would be approaching to outcome in a slower pick-up in mercantile activity and acceleration than now forecast.

The Australian dollar struggled to reason a belligerent following a rate decision, with AUD/USD pulling behind from a 0.7790 region, though a pierce was ephemeral as a span finished a day during 0.7828. Want More Insight? Sign adult and join DailyFX Market Analyst David Cottle LIVE to cover a RBA rate decision.

AUD/USD Daily Chart

AUD/USD Daily Chart

  • AUD/USD carves a uninformed array of reduce highs lows entrance into April, with a break/close subsequent a former-resistance section around 0.7650 (38.2% retracement) opening adult a subsequent downside segment of seductiveness around 0.7590 (100% expansion).
  • Next area of seductiveness comes in around 0.7460 (23.6% retracement) to 0.7530 (38.2% expansion), that lines adult with December-low (0.7501), with a near-term opinion for AUD/USD slanted to a downside as a Relative Strength Index (RSI) clings to bearish arrangement carried over from late final year.
  • However, a array of unsuccessful attempts to tighten subsequent a 0.7650 (38.2% retracement) segment raises a risk for a miscarry in a sell rate, with a initial topside jump entrance in around 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion).

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— Written by David Song, Currency Analyst

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