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Forex: AUD/USD higher post-RBA on hold

Following RBA rates on hold at 3%, given “Global growth is forecast to be a little below average for a time, but the downside risks appear to have lessened over recent months,” the central bank said, AUD/USD is mostly unchanged around the weekly initial price at 1.0205, last at 1.0208, off fresh weekly highs at 1.0222.

Too soon to say, but AUD/USD is currently breaking to fresh highs last at 1.0225, above previous highs printed with better than expected Australian retail sales for the month of January, best since last June, while Current account deficit also showed a better result. Local share markets are in the green overall, with Shanghai Cposite above the +1%, while Australian ASX is up +1.39%.

Immediate resistance to the upside for AUD/USD shows at Mar 01 highs at 1.0240, and Feb 18 lows at 1.0275, and Feb 28 highs at 1.0290. To the downside, closest support lies at Feb 27/Mar 01 lows 1.0180, followed by Sept 05 lows at 1.0162, and Oct 08 lows at 1.0145.

RBA retains dovish tone, but no urgency to cut

RBA held rates unchanged at 3% as widely expected. The accompanying statement failed to provide fresh clues either. The central bank said the Aussie remains overvalued - still expensive - , global markets remain susceptible to shocks - downside risks appear to have lessened over recent months - and that China growth has remained fairly robust; with regards to inflation, the RBA still retains dovish tone, saying "outlook for inflation gives scope to ease." However, it continues to show little urgency to cur further in the statement.
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Forex Flash: EUR/USD should weaken no matter what ECB does – RBS

With key event ahead this week in the form of ECB meeting Thursday, FX Trading Strategist at RBS Greg Gibbs believes: “The EUR should weaken in any case if they do not cut,” he says, “because it represents a central bank that is taking excessive risks on not easing enough in a region that is experiencing deteriorating political conditions that will dampen business confidence,” the analyst concludes. EUR/USD is last at 1.3029, off fresh weekly highs at 1.3040.
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