Forex Flash: AUD/USD remain capped by tough resistance at 1.0300 – Westpac

FXstreet.com (Barcelona) - The RBA’s rate cut was a little earlier than most expected but no great shock to the market. Strong AUD TWI seems to be increasingly important for policy, not in terms of a currency war but by allowing interest rates to fall further than they would have otherwise. According to Global FX Strategist Sean Callow at Westpac, “This limits the damage to AUD/USD while the jobs surge muddies the waters further.”

According to Callow, “With AUD/USD proving quite resilient after the RBA rate cut and the jobs data surprisingly strong, some squaring up seems likely near-term, leaving us neutral on the week.” The high 1.0300s remain very tough resistance, with a re-test of 1.0115/50 more likely on the week in choppy trade. Copper’s 3-month highs and steadying iron ore combine with global equity optimism to help AUD/USD avoid sizeable losses on the threat of further RBA easing.