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Australia’s central bank left the interest rate unchanged at 2.50% as widely expected. In the accompanying statement, the central bank explicitly said that the value of the Australian dollar is too high.

AUD/USD which already slid from the highs of 0.9521, lost the 0.95 level and fell as low as 0.9463. Is the recovery of AUD/USD over? Can we expect it to resume its falls and challenge the long term uptrend support line?

This is the 30 minute chart, showing the reaction to the RBA:

AUDUSD November 5 2013 falling on RBA rate decision technical chart for forex trading currencies

So, what did the RBA say? Glenn Stevens and his colleagues see the current policy as appropriate and also see growth in the non-mining sectors. However, it is still too early to say if sentiment among both business and consumers can continue improving.

Inflation, which is of worry to the ECB but not to Australian policymakers, is expected to remain consistent, and the full impact of past cuts is still to be felt.

So, while no new rate cut is expected anytime soon, the RBA still wants the A$ to slide.

Looking at the bigger picture, the Aussie still maintains a relatively safe distance from uptrend support:

AUD USD Technical chart November 5 2013 for forex trading uptrend support line still awaiting the Australian dollar

 

There are still a few more big events during the week. Employment data is the biggest economic release out of Australia.

For more, see the AUDUSD forecast.