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FxWirePro: AUD/USD shows slight weakness ahead of RBA policy meeting, statement in focus for further impetus
AUD/USD chart - Trading View
AUD/USD hit 4-month highs above 0.68 mark overnight and is currently showing slight weakness ahead of the RBA policy meeting.
Analysts expect no major surprises from the event with the RBA widely expected to keep the interest rates near the record low of 0.25%.
Focus will be on the statement that follows. Traders will watch for any change in the Quantitative Easing (QE) for fresh impulse.
The latest upbeat rhetoric from Governor Philip Lowe rules out any action during the meet, which is likely to bode well for the Aussie dollar’s recent strength.
"The RBA Board Meeting is unlikely to throw any major surprises. We expect the Bank is likely to strike an upbeat note, pointing to health outcomes that are not as bad as initially feared with the potential for the labor market to hold up better than anticipated. At the same time, we expect the Bank to reinforce its commitment to employment and inflation objectives, implying rates on hold are likely for the next few years. The Bank is likely to pledge further support in keeping funding costs low and step up bond purchases if required. Otherwise, the RBA is watching the data like the rest of us.", notes TD Securities in a report.
Technical analysis shows a strong bullish bias. Breakout at 200-DMA confirms further gains for the pair.
Momentum strongly bullish and rising volatility to carry the pair higher. Scope for test of 0.7031 (Dec 2019 high).