FXStreet (Guatemala) - AUD/USD is approaching the RBA meeting with caution. While there is a 94% chance that the Central Bank are on hold, despite the opening turmoil this year, given the strength of the Australian Economy, it is what Stevens' outlook on a number of areas that keep us apprehensive. Analysts at ANZ explained that one of the clear themes in markets so far this year has been the sharp lift in volatility and nervousness brought about by Chinese economic weakness (yesterday's PMI data hasn't helped the cause). How central banks have chosen to respond to this backdrop has been another key theme, and the preference appears to be for further easing (BoJ) or at least a signal that further policy easing is a real prospect (ECB and perhaps more reluctantly the RBNZ)," and further adding, "A challenged Chinese and global growth backdrop continues to leave the distribution of risks firmly tilted to the downside." "Chill-out"? However, while China and global risks have been a clear threat to individual economies, the RBA's tone of late has adopted the same attitude you might find on Bondi beach among the groups of happy go luck surfers. "Chill out", was the message from Stevens last year and indeed there have certainly not been any downside surprises in the economy as yet. The Australian economy rolled over into 2016 with the official GDP numbers for December showing growth better than expected and an improvement of mid 2015. Inflation remains on track, albeit at the bottom end of the RBA's target band. Business confidence and conditions are, for the best part, positive and above all, the jobs market has been superior with data the best in 10 years. "We remain of the view that further policy easing is likely to be required later this year as the stimulus from residential construction activity and the depreciation in the AUD fades," explained the analysts at ANZ. All in all, the domestic picture, fueled by low rates and a weaker Aussie had allowed the RBA some time off, to chill-out , but perhaps it might be prudent that Stevens takes note of how the year has started out, the comeback in the Aussie vs a continued decline in commodity prices and a Fed that might not be able to continue gradually increasing interest rates in the very near future. What about China; is it all that bad? Another consideration is whether China will in fact face a hard landing and whether the Yuan will fall out of bed as far as some are predicting, or have markets over reacted? We are seeing signs that indeed China is starting to stablise from within and successfully moving towards a more service lead economy, and although it may be years before volatility slows down, and how China and investors face a myriad of challenges, from corruption to unreliable economic data, there could still be positive, or less negative, surprise ahead. However, that is a whole different story from today's RBA preview. How will AUD/USD react to the statement? As for how the Aussie might react on the statement, "AUD/USD should be little changed on the statement we expect, perhaps rise 20 pips or so. 0.7150/70 remains likely to be tested multi-session," suggested analysts at Westpac Banking Corporation. Key levels to monitor in AUD/USD AUD/USD upside Technically, the 55 day ma at 0.7145 is an obvious target that the pair managed to score last week, capping the recent rally. Beyond there lies the 0.7221 mark, being the 78.6% retracement. AUD/USD downside To the downside, the 20 dma is at 0.6991 and would come into play below a break of the 0.71 handle and 0.7058, 28th Jan low. On a full reversal of the recent rally, 0.6774 is the 2004 low below 0.6920 that guards the 0.6828/29 recent lows. For more information, read our latest forex news.