Top Story

RBA Hold At 1.5%, Maintain Confidence With Employment

Summary of RBA’s Monetary Policy Decision (April 2019):

  • Rates unchanged at 1.5%
  • Growth in international trade has declined
  • Long-term bond yields have declined further, consistent with the subdued outlook for inflation and lower expectations for future policy rates in a number of advanced economies.
  • The Australian labour market remains strong
  • GDP points to a softer picture for the economy
  • Central scenario is for underlying inflation to be 2% this year and 2.25% in 2020

Overall the statement remains fairly-balanced, although it continues to appear that RBA’s confidence in the labour market is fending off a dovish stance. So, if we’re to see labour data soften, expect calls for a rate-cut to increase and AUD to face renewed pressure. AUD is currently the second weakest major behind NZD today, although volatility currently remains contained overall. 

AUD/NZD has found resistance at 1.0500 following the meeting and the four-hour chart is trying to carve out a bearish outside candle. There’s potential for weakness over the near-term, although we remain bullish above 1.0400 due to the intraday trend structure.

Moreover, the cross is trying to carve out a bullish trend after confirming a bullish wedge reversal following RBNZ’s dovish meeting last week. Whilst the yield differential is favourable to NZD with a 25bps advantage over RBA’s cash rate, AUD/NZD moved higher as traders tried to adjust for the increased likelihood of an RBNZ cut whilst RBA remains neutral.

Ultimately, the bullish wedge projects an approximate target back around the 1.0670 highs, so bulls could consider setups following signs of consolidation or retracement towards key levels of support.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

The markets are moving. Stop missing out.

Open an Account