AUD/USD Daily Forecast – RBA Maintains Interest Rates

RBA Holds the Course on Interest Rates

The RBA was widely expected to maintain rates, and there were no surprises in the RBA rate statement. Policymakers noted that there was a risk to the downside with regard to global economic conditions and inflation was expected to remain at low levels. Most importantly, RBA Governor Philip Lowe said it was reasonable to expect rates to remain low for the near future. This means that the Aussie is unlikely to receive support from higher rates anytime soon.

AUD/USD posted considerable gains on Tuesday, despite retail sales declining by 0.1%. Investors preferred to focus on the current account balance, which posted a surplus of A$ 5.9 billion, the first surplus in 44 years. The upward trend has continued in Asian trade on Wednesday, courtesy of a strong GDP in Q2, as the 0.5% gain matched expectations.

Technical Analysis

AUD/USD was unable to find its footing at the start of September, but the pair appears to have some positive momentum, as it has been heading higher since Tuesday.

On the upside, I continue to keep a close eye at 0.6805. This line has been reliable resistance, although it was under pressure in mid-August. If the current upswing turns into a rally, I expect this line to be tested and possibly breached, perhaps as early as this week.

0.6686 is a major support level. This line has some breathing room, with the Aussie currently on an upswing.