AUD/USD jumps to a high of 0.7048 from 0.7000
Buyers are now looking to establish a more bullish near-term bias as price is breaking above both key hourly moving averages as the RBA statement offered little change and the central bank decided to hold its cash rate steady at 1.50%.
I reckon this has a lot to do with the elections in two weeks’ time and the RBA will then proceed to cut rates in the aftermath. The subtle downgrade to their inflation outlook (2019: 1.75%, 2020: 2.00%; previously 2019: 2.00%, 2020: 2.25%) certainly suggests that they may do so next but the fact they didn’t do so here will still put a question mark ahead of their next meeting on 4 June.
As price establishes a more bullish near-term bias, I won’t go chasing for shorts just yet but my bias is still to fade the rallies in AUD/USD so let’s see how price action settles in the coming hours as traders digest the decision and statement.
Notable offers are said to be closer to 0.7075 and 0.7095 but I reckon the latter is where sellers will likely lean on to establish a base as there is added resistance from the 0.7100 handle.