AUD/USD posted gains close to 1.0% on Tuesday, but has given up most of these gains. The sharp rise was in response to the unexpected decision by the Reserve Bank of Australia to hold rates at 1.50%. Other Australian releases were also positive. Retail sales slowed to 0.3%, beating the estimate of 0.2%. The trade surplus increased to A$4.95 billion, above the forecast of A$4.49 billion. In the U.S., there were no major events. JOLTS Job Openings improved to 7.49 million, beating the estimate of 7.35 million.
The RBA held the course on Tuesday, surprising the markets, which had expected the bank to cut rates to 1.25%. The markets had priced in a rate cut at close to 50%, so the decision to hold rates helped boost the Aussie in the Asian session. However, AUD/USD was unable to consolidate and gave up most of these gains in European trade. The Australian economy has been damaged by the economic slowdown in China, which is Australia’s largest trading partner. Inflation fell to 0.0% in the fourth quarter, its lowest level in three years. This weak release raised speculation of a rate cut, but the RBA continues its wait-and-see stance, hopeful that the economy will find its feet without the help of a rate cut.
•0.6970 is a weak support level.
•0.7085 is the next resistance line
•Current range: 0.6970 to 0.7085
The RBA held the course on Tuesday, surprising the markets, which had expected the bank to cut rates to 1.25%. The markets had priced in a rate cut at close to 50%, so the decision to hold rates helped boost the Aussie in the Asian session. However, AUD/USD was unable to consolidate and gave up most of these gains in European trade. The Australian economy has been damaged by the economic slowdown in China, which is Australia’s largest trading partner. Inflation fell to 0.0% in the fourth quarter, its lowest level in three years. This weak release raised speculation of a rate cut, but the RBA continues its wait-and-see stance, hopeful that the economy will find its feet without the help of a rate cut.
•0.6970 is a weak support level.
•0.7085 is the next resistance line
•Current range: 0.6970 to 0.7085
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