Aussie Remains Volatile After RBA’s Cash Rate Decision, downside pressure likely; April 06, 2021

Australia’s Cash Rate Decision

Today RBA released Interest rate decision at 0430 GMT/1000 IST. The RBA kept interest rate unchanged at 0.10 pct. It’s among the primary tools the RBA Reserve Bank Board uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

Key Highlights from RBA:

    • The rollout of vaccines is supporting the recovery of the global economy, although the recovery is uneven.
    • Inflation remains low and below central bank targets.
    • The 3-year government bond yield in Australia is at the Board’s target of 10 basis points and lending rates for most borrowers are at record lows.
    • The Australian dollar remains in the upper end of the range of recent years.
    • The recovery is expected to continue, with above-trend growth this year and next.
    • Later in the year it will consider whether to retain the April 2024 bond as the target bond or to shift to the next maturity.
    • The RBA is prepared to undertake further bond purchases if doing so would assist with progress towards the goals of full employment and inflation.
    • The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.
    • The RBA’s board of directors estimates that jobs and inflation expectations will not be reached until 2024 at the earliest.

Technical View:

AUDUSD : The Aussie reverses early Asian hours gain and hovers around $0.7620 mark. The pair made intraday high at $0.7660 and low at $0.7620 mark. A day chart with triple EMA confirms bearish trend in long run while H1 Chart confirms up trend for the time being. Aussies remains noticeably volatile after RBA’s monetary policy statement. A sustained close above $0.7660 on H1 chart requires for the upside rally. Alternatively, current downside movement will drag the parity down below $0.76 mark.

Key Resistances: $0.7660, $0.7692, $0.7722, $0.7740, $0.7778

Key Supports: $0.7590, $0.7570, $0.7520, $0.7488, $0.7450

Take a look and do trade wisely!
Good Luck