AUD/USD Vulnerable to Dovish Reserve Bank of Australia (RBA) Comments

Reserve Bank of Australia (RBA) to Keep Cash Rate during Record-Low of 1.50%. Will Governor Philip Lowe and Co. Continue to Endorse a Wait-and-See Approach for Monetary Policy?

AUD/USD Snaps Bearish Sequence. Relative Strength Index (RSI) Stalls Ahead of Oversold Territory Comes Up Against Trendline Resistance.

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

DailyFX Calendar

The Reserve Bank of Australia (RBA) seductiveness rate preference might beget a singular greeting as a executive bank is widely approaching to keep a money rate on hold, yet a collection of dovish comments might import on AUD/USD should a executive bank tame bets for an approaching rate-hike.

Governor Philip Lowe Co. might merely try to buy some-more time as ‘further swell in shortening stagnation and carrying acceleration lapse to aim is expected,’ and a executive bank might continue to validate a wait-and-see proceed for financial process as ‘the Bank’s executive foresee for a Australian economy is for GDP enlargement to collect up, to normal a bit above 3 per cent over a subsequent integrate of years.’ As a result, AUD/USD might continue to connect over a entrance days, with a span during risk for a near-term miscarry as it snaps a array of reduce highs and lows from a prior week.

However, a RBA might continue to quell expectations for aloft borrowing-costs as ‘inflation is low, with both CPI and underlying acceleration using a little next 2 per cent,’ and a Australia dollar might face a some-more bearish predestine should a executive bank uncover a larger eagerness to keep a record-low money rate via 2018.

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

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

AUD/USD 5-Minute Chart

AUD/USD 5-Minute Chart

The Reserve Bank of Australia (RBA) left a money rate unvaried during a initial assembly for 2018, and it seems as yet a executive bank will safety a record-low rate via a foreseeable destiny as ‘the low turn of seductiveness rates is stability to support a Australian economy.’ The remarks advise Governor Philip Lowe and Co. are in no rush to exercise aloft borrowing-costs as ‘household incomes are flourishing slowly and debt levels are high,’ and a executive bank might continue to foster a wait-and-see proceed for financial process as ‘inflation is expected to sojourn low for some time.’

The discreet remarks dragged on a Australian dollar, with AUD/USD dipping next a 0.7850 region, yet a greeting was ephemeral as a span finished a day during 0.7905. Want More Insight? Sign adult and join DailyFX Currency Strategist Ilya Spivak LIVE to cover a RBA rate decision.

AUD/USD Daily Chart

AUD/USD Daily Chart

Want to know what other banking pairs a DailyFX group is watching? Download and examination a Top Trading Opportunities for 2018.

  • Near-term opinion for AUD/USD is dark with churned signals as a span snaps a bullish method from a prior week, while a Relative Strength Index (RSI) struggles to pull into oversold domain and comes adult opposite trendline resistance.
  • May see a bullish RSI trigger emerge as a near-term decrease in AUD/USD appears to be stalling around a 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion) region, with a initial topside jump entrance in around 0.7850 (38.2% retracement) to 0.7860 (61.8% expansion).
  • Next segment of seductiveness comes in around 0.7930 (50% retracement) to 0.7940 (61.8% retracement) followed by 0.8030 (38.2% expansion).

New to trading? Review a ‘Traits of a Successful Trader’ array on how to effectively use precedence along with other best practices that any merchant can follow.

— Written by David Song, Currency Analyst

To hit David, e-mail Follow me on Twitter during @DavidJSong.

To be combined to David’s e-mail placement list, greatfully follow this link.

About author