AUD/USD takes a swift trip up and back down on the RBA’s rate call

• Aussie markets bid on RBA statement, quickly fade the bullish action.
• The RBA continues to hope for further inflation and improved economic sentiment, albeit  far off in the distance.

The AUD/USD felt a brief pop to the 0.7340 region immediately following the Reserve Bank of Australia’s (RBA) latest rate statement, but is beginning to bed back down into the week’s tight range as bulls revert back to their neutral positions.

The RBA held interest rates at 1.5%, as markets have become widely accustomed to from the Australian central bank, with over two years under their belt at holding interest rates where they currently are, and although the RBA highlighted that household consumption, housing markets, trade frictions, and stumpy wage growth all continue to keep interest rates steady, the central bank did manage to strike a somewhat hawkish tone overall, noting that business conditions are continuing to improve steadily, and inflation is expected to average above the RBA’s 3% minimum target for both 2018 and 2019, with the key add-on being that the RBA expects inflation to begin picking up on the outside of the range, and is calling for increased price expansion pressure through 2019 and 2020.

AUD/USD levels to watch

The Aussie is seeing thin action this week, and the Antipodeans are expecting to continue seeing constrained volumes through the rest of the week with Chinese institutions shuttered for the Chinese ‘golden week’, a week-long holiday to celebrate China’s National Day observance. Late last week saw the AUD mark in a fresh new bottom near the 0.7200   critical handle, and the bullish bounceback has so far been lackluster, and traders could be priming the pump for another push lower, with long action constrained by 0.7240, last Friday’s peak.