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AUD/USD pierces through 0.7100 on RBA’s rates on hold

FXStreet (Mumbai) - The AUD/USD pair is currently caught by fresh bid wave and spiked above 0.71 barrier after the Reserve Bank of Australia (RBA) left its monetary policy settings unadjusted.

AUD/USD rises from 0.7080 levels

Currently, the AUD/USD pair trades 0.49% at fresh two-week highs of 0.7120, jumping over 40 pips post RBA decision. The Aussie found fresh bids near 0.7080 levels and jolted higher towards 2-wweek highs after the Australian dollar fresh impetus from the RBA’s rates on hold policy announcement.

The central bank sounded optimistic on the economic growth prospects while extending the same rhetoric on the AUD level – ‘The Australian dollar is adjusting to the significant declines in key commodity prices.’ The RBA also noted that further assessment on the monetary policy outlook will remain data-dependent.

On data space, the Australian economy posted a trade deficit of AUD 3.095 billion in August, sliding 11% from July's shortfall, missing expectations for a shortfall of AUD2.40 billion. The data is largely ignored by the markets.

Meanwhile, focus now shifts towards the key US macro releases due later in the NY session ahead of Wednesday’s FOMC minutes release, which may pose further downside risks to the US dollar.

AUD/USD Levels to watch

The pair has an immediate resistance at 0.7161 (Sept 22 High) levels, above which gains could be extended to 0.7198 (Sept 21 High) levels. On the flip side, support is seen at 0.7053 (Sept 22 Low) levels from here it to 0.7036 (Oct 5 Low).

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The Reserve Bank of Australia, as widely expected by all 27 forecasters in a Bloomberg survey, left interest rates unchanged at 2%, while not ruling out further easing further down the road should conditions warrant to do so.
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AUD/USD: Will buyers take control above 0.71?

AUD/USD has seen an algos-led spike in response to the RBA rate decision - no change at 2% -, reaching a high of 0.7120, with some follow through, which is the critical clue, also seen at present.
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