AUD/USD reverses knee-jerk to 0.7250 on RBA’s status-quo

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 1, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The AUD/USD pair reverted to daily highs after witnessing a steep drop to 0.7250 levels after the Reserve Bank of Australia (RBA) left its benchmark interest rates unchanged at 2% - record low.

    AUD/USD: RBA move already priced-in?

    Currently, the AUD/USD pair trades 0.67% higher at 0.7274, capped below 0.7286 (Nov 25 High). The Aussie recovered from a downward spike in a knee-jerk reaction to the RBA’s status-quo and reverted to the familiar range around 0.7270 seen pre-RBA decision.

    The Australian dollar failed to benefit from the RBA rates on-hold stance, as such move was already priced-in by markets, having witnessed more than 50-pips rally ahead of the RBA statement.

    The RBA statement offered no new surprises, with the RBA maintaining the language on the AUD level, “AUD is adjusting to significant declines in commodity prices.”

    Meanwhile, the AUD/USD pair also remains supported on the back of upbeat Caixin China’s manufacturing Purchasing Managers' Index (PMI) and recovery in commodity prices.

    AUD/USD Levels to watch

    The pair remains capped below Nov 25 High at 0.7286 and now hovers near 0.7275 region, with the immediate resistance at 0.7299 (Oct 23 High), above which gains could be extended to strong hurdle located at 0.7365/66 (Oct 13 & 15 High) levels. On the flip side, the immediate support is seen at 0.7220 (20-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7169 (100-DMA).
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