RBA stays on hold

As was widely expected RBA stayed on hold at +1.50%. The accompanying statement had some dovish tones, as it expects inflation to remain low for some time while wage growth remains low and is likely to continue for a while yet. Other points which are worth mentioning is that household consumption remains a source of uncertainty and that there are concerns about the direction of the international trade policy in the US. AUD/USD treated the decision as a non-event as the market had positioned itself ahead of the release of the decision. Should the financial releases this week, support a more hawkish stance on behalf of the RBA in the future, we could see the Aussie strengthening.

AUD/USD rose yesterday aiming for the 0.7680 resistance level in the European session, however stabilized and corrected somewhat downwards, ahead of the RBA decision during the today’s Asian session. The pair could trade in a sideways manner today with some bearish tones at the aftermath of the RBA interest rate decision and ahead of the US financial releases. Should the pair come under selling interest we could see it reaching and even breaking the 0.7575 support line. If it finds fresh buying orders along its path we could see it breaking the 0.7680 resistance line and aim for the 0.7820 resistance hurdle.