RBA passes without event providing comfort to AUDUSD shorts
Tony Sycamore October 5, 2021 5:17 AM
As widely expected, at its monthly board meeting this afternoon, the RBA kept monetary policy on hold, including its targets of 10 basis points for the cash rate and the yield on the April 2024 Australian Government bond.
The RBA's forward guidance remained dovish, again signalling that the conditions needed to raise interest rates (inflation sustainably between the 2% to 3% target rate and wages growth of 3%) are unlikely to be met until 2024 the earliest.
After tapering its Quantitative Easing program at its last meeting, it committed to keeping the rate of bond purchases steady at $4bn a week until February.
The RBA remains confident that once the current lockdowns end, the economy will bounce back, although the rebound may be less dynamic than the one that followed the 2020 lockdown.
Following the announcement, the AUDUSD dropped from .7275 to a low of .7260 after the RBA reinforced its support for the economy and dovish guidance.
The market remains heavily short of the AUDUSD and should the AUDUSD break above the .7320/40 resistance area, it may prompt some short covering back towards .7450.
Until then, however, the AUDUSD remains vulnerable to a retest of the August .7106 low.
Source Tradingview. The figures stated areas of October 5th, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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.