Author: Mr. Amar – Technical Analyst

The statement on the outcome of the RBA Board meeting will be released today. The benchmark interest rate is widely expected to remain at an all-time low of 0.1%. Analysts said the focus will be on language changes in the decision statement, particularly the last sentence of the March statement, which reads, “The board is prepared to be patient.” Inflation is now back on target and the unemployment rate, at 4.0%, will soon fall below 4% for the first time since 1974, analysts said. However, the RBA has stated that it will not lift rates until inflation is “sustainably” within the target band – which requires a lift in wages growth from current relatively modest levels.

Positive global risk sentiment supported the AUD, which hit a fresh yearly high overnight and deepened weekly resistance. The question is, will this continue? The RBA could, however, prepare Australian households and businesses for an imminent change in monetary policy, with Governor Philip Lowe conceding that “key interest rates are likely to rise later this year” and a change in future direction could bring short-term changes. Breakout in AUDUSD if off October high at 0.7556. Conversely, AUD/USD could try to recover from the June high at 0.7775, but further exchange rate appreciation could see the recent change in sentiment last year. After that, the RBA rate decision can feed the most recent progress in AUD / USD if the central bank shows a greater willingness to change the corridors, but the infringement of the height of October high can be returned to a near-term.