AUD/USD rebounded above its 100-day moving average at 0.7052 after the Reserve Bank of Australia held rates steady but kept the door open to a future hike. The pair fell to a session low of 0.7041 right after the decision, then buyers pushed it to a new session high of 0.7068.
AUD/USD is higher on the day, with buyers back in control after the rate decision shook the pair in both directions. The RBA's tone did the heavier lifting once the initial reaction faded.
RBA holds, keeps hawkish tone
The RBA kept rates unchanged, but its message stayed in the hold-or-hike camp. Rate cuts are not currently part of the discussion, and the next move could still be higher if inflation and cost pressures fail to ease. That hawkish stance has ultimately helped support AUD/USD today.
Initial drop, then a rebound
The initial reaction to the decision was relatively muted. AUD/USD actually moved lower after the announcement, falling back below both the 100-day and 100-hour moving averages near 0.7052 and reaching a session low of 0.7041.
However, sellers could not maintain the downside momentum. Buyers returned and pushed the price back above both the 100-hour and 100-day moving averages. That shift propelled the pair to a new session high of 0.7068 and re-established the 100-day moving average as a key support level.
Next target sits at 0.70707
The rebound puts the focus back on an important topside target at the 50% midpoint of the move down from the May 5 high to the late-June low, at 0.70707. The price moved above that midpoint on Friday and again yesterday, only to quickly rotate back to the downside both times. As a result, getting above 0.70707 and staying there would mark an important technical step and could trigger additional upside momentum.
Just above that level sits Friday's high at 0.7077. A break above both levels would open the door toward the next swing area between 0.7100 and 0.7113. Beyond that, the 61.8% retracement of the decline from the May high comes in at 0.7119.
For now, buyers hold the advantage with the price back above the 100-day moving average. It would take a move back below that average to give sellers more hope, with more downside control coming on a break below the rising 200-hour moving average at 0.7036.
Source: Investinglive RSS Breaking News Feed
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