As was widely expected RBA remained on hold, keeping interest rates at +1.50%. The accompanying statement had a neutral to dovish tone, keeping the same arguments more or less as in the previous decision. Dovish comments included that wages growth remains low and that headline CPI rate to be lower than earlier expected in 2018, however on the bright side, inflation is forecasted to accelerate more in 2019/20 than what was previously expected. AUD/USD treated the decision as a non-event, as volatility remained low and the pair kept its sideways movement.
AUD/USD continued its sideways movement yesterday, between the 0.7410 resistance level and the 0.7370 support line. As volatility seems to remain low, we maintain our sideways bias for today and the pair could be more USD led. Technically, it would be evident that the RSI indicator in the 4 hour chart remains near the reading of 50, implying a rather indecisive market. Should traders favor AUD long positions, we could see the pair breaking the 0.7410 resistance line and aim for the 0.7440 resistance level. On the flip side, should traders favor AUD short positions we could see the pair breaking the 0.7370 support line and aim for the 0.7345 support area.