- The Reserve Bank of Australia (RBA) kept rates unchanged at the record low of 1.5 percent as expected.
- AUD/USD has hardly moved in response to status quo policy and remains at the mercy of the action on the Chinese Yuan.
The Australian dollar is seeing little action post-RBA rate decision. At press time, the AUD/USD pair is reporting moderate gains at 0.7395.
The RBA held interest rates unchanged at 1.5 percent and sounded cautious on wage growth and housing market. The central bank said the headline consumer price index (CPI) is likely to be lower-than-expected this year but is expecting an above-forecast inflation in 2019 and 2020.
All-in-all, the RBA statement offered no hawkish or dovish surprises, thus leaving the AUD at the mercy of the Chinese yuan and broader market sentiment.
The AUD and other China proxies may post gains if the oversold Chinese currency shows signs of life. However, the bulls are cautioned against being too ambitious as the escalating Sino-US trade tensions could hurt the risk sentiment.
AUD/USD Technical Levels
Resistance: 0.7745 (50- day moving average), 0.7484 (July 10 high), 0.7531 (100-day moving average)
Support: 0.7348 (Aug. 3 low), 0.7310 (July 2 low), 0.7184 (61.8% Fib R of 2001 low – 2011 high)
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