AUD/USD reverses a spike to 10-DMA on RBA

The AUD bulls remain unimpressed by the unchanged monetary policy stance adopted by the RBA at its policy meeting today, as such a move was already priced-in by the markets.

The AUD/USD pair is seen reversing a spike to daily highs near 0.7630 levels and surrenders 0.76 handle, as markets digest the headlines from RBA Governor Lowe’s accompanying decision statement.

The Aussie bulls disappointed somewhat as the RBA Governor Lowe maintained its neutral bias on the interest rate outlook, while reiterating that rising Australian dollar could complicate economic transition. Meanwhile, markets are pricing in 15bp of hikes in Australia over the coming 12 months, or a 60% chance of a hike.

With the RBA decision out of the way, focus turns back towards the North Korean missiles launch-led risk-aversion and rising March Fed rate hike bets, both of which are expected to remain the leading drivers for the major.

AUD/USD Levels to watch   

At 0.7598, the immediate resistance at 0.7650/56 (psychological levels/ 20-DMA) above which gains could be extended to the next hurdle located 0.7701/10 (Mar 1 & Feb 27 high) and 0.7743/50 (Feb 23 high/ psychological levels). On the flip side, the pair finds the immediate support located at 0.7542 (200-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7523/20 (Jan-mid lows) and below that 0.7507/00 (Jan 27 low/ round number).