RBA keep rates on hold at the record lows of 2.25% and upon first glance produce a ‘carbon copy’ statement
At today’s meeting the Board judged that it was appropriate to hold interest rates steady for the time being. Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board will continue to assess the case for such action at forthcoming meetings.
The statement, bar a few words here and there, is pretty much a carbon copy. The AUDUSD spiked 1.5% against the Greenback and immediately hit the initial counter-bias target outlined earlier today. As we head into UK and US open we could see a bullish follow-through as traders absorb the information around the globe.
The spike broke the bearish trendline and now resistance below 0.77 resistance with a break above confirming a Double Bottom which could target 0.7850. Initial target however would be 0.755.
RBA could push AUDNZD to parity today
The Aussie bounced higher today following stronger than expected retail sales. Assuming RBA cut rates today then such spikes merely present more favourable prices to short the Aussie, leading into it.
– The trend is clearly bearish across multiple timeframes
– Any spikes higher could stall resistance zones or trendlines, to then resume the downtrend
– Today’s high has tested the 38.2% retracement but we can also consider the 50% / 1.0150 resistance zone to fade into, as we head into the Cash Rate decision.
– It would take a rate hold and ‘carbon copy’ statement to see Aussie see any extended gains
– A rate cut today should see AUDNZD hit parity today
– Even if we see rates on hold and Aussie bounces higher, AUDNZD will remain on my short watch list to target parity and 0.90 over the coming week/s