AUD/USD surges past 0.7350 level after RBA minutes

The AUD/USD pair jumped beyond the mid-point of 0.7300-0.7400 handle after minutes of the RBA's latest monetary policy meeting dumped expectations of further rate-cuts in the near-term.

Earlier in May, the central bank surprised markets by lower its benchmark interest rates by 25bps to a fresh record low levels, citing concerns over slowing inflation. Moreover, the central bank also lowered its inflation forecast for the rest of 2016, which further fueled speculations of a further rate-cut in the near-term. However, the minutes revealed that the central bank seems more inclined to wait for further information before deciding to ease further as the central bank expects inflation to pick-up to 1.5%-2.5% by mid-2018.

The pair on Monday, held and rebounded from the very important 200-day SMA despite of weak Chinese economic data over the weekend. The pair also got a minor boost from a weaker reading on the US Empire State manufacturing index for May, released during NA session on Monday.

From technical perspective, rebound from 200-day SMA might have been led by short-covering and from near-term oversold conditions. Moreover, the pair is currently hovering around 100-day SMA and hence, a follow through buying interest would be required to negate the possibilities that the pair might resume its near-term depreciating move.

Technical levels to watch

From current levels, bulls would be eyeing to conquer 0.7370-75 horizontal resistance, which if cleared paves way for further up-move for the pair. On a sustained strength above 0.7370-75 resistance, the pair seems all set to surpass 0.7400 handle resistance and head towards testing its next major resistance near 0.7440-45 zone.

On the downside, 0.7300 round figure might now protect immediate downside, which if broken would negate the bullish momentum and drag the pair back towards retesting 200-day SMA support, currently near 0.7260 region.