Australian dollar rebounds after the RBA interest rate decision
The Australian dollar recovered slightly after the Reserve Bank of Australia (RBA) delivered its second interest rate decision of the year. The bank left its main interest rate unchanged and explained its rationale for bringing forward some of its asset purchases. This is after the bank increased its daily asset purchases to A$4 billion from A$2 billion. In total, the size of the quantitative easing program is unchanged at A$200 billion. Still, there are concerns about the ongoing surge in house prices. The recent data revealed that the house price index increased by 2.1% in February.
The euro wavered against the US dollar after the latest EU inflation and German employment numbers. According to Eurostat, the preliminary consumer price index (CPI) increased by 0.9% in February while the core CPI rose by 1.1%. This increase was mostly because of food, alcohol, and tobacco, whose price increased by 1.4%. The price of services increased by 1.2% while that of non-energy industrial goods prices rose by 1.0%. Meanwhile, in Germany, the unemployment rate remained unchanged at 6.0% while the unemployment change was 9,000.
The Canadian dollar rose against the US dollar after the latest Canadian GDP numbers. The data revealed that the overall economy expanded by 2.3% in the fourth quarter. This led to an annualised increase of 9.6%, lower than the previous month’s 40.5%. Economists expect that the country’s economy will continue doing well in the first quarter as the vaccination process goes on. Also, the currency gained even after the price of crude oil declined today. Brent declined by 0.25% to $63.52 while the West Texas Intermediate (WTI) dropped to $60.59.
The AUD/USD pair rose to an intraday high of 0.7790 after the RBA interest rate decision. On the four-hour chart, the price seems to be forming a bearish flag pattern that is shown in white. It also moved above the important support level of 0.7688 while the RSI has moved from the oversold level to the current 47. It has also moved above the ascending yellow trendline. Therefore, because of the bearish flag pattern, there is a possibility that it will resume the downward trend.
The EUR/USD pair declined to an intraday low of 1.1991, which was the lowest level since February 8. On the four-hour chart, the price is below the 25-period and 15-period exponential moving averages. Also, the Relative Strength Index (RSI) has moved slightly above the oversold level of 30 while the MACD is still below the neutral level. The price is also slightly below the dots of the Parabolic SAR. Therefore, the pair may continue to drop as bears target the next support at 1.200.
The USD/CAD pair dropped to an intraday low of 1.2647, which is substantially lower than yesterday’s high of 1.2746. On the four-hour chart, the price has moved back to the descending channel shown in yellow. It is also slightly above the short and medium-term moving averages. The pair also seems to be forming a bullish flag pattern. Therefore, the pair may resume the upward trend.