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The AUD/USD rose slightly after the latest Reserve Bank of Australia (RBA) interest rate decision and the trade surplus data. It is trading at 0.7740, which is below last week’s high of 0.7818.
RBA decision
The RBA concluded its two-day meeting and delivered its rate decision on Tuesday morning. As expected, the central bank left the interest rate unchanged at 0.10%. It also announced that it would continue to make its asset purchases in a bid to spur economic growth. The bank also left its yield curve control plan intact. It is using this plan to keep the 3-year government bonds in check.
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The RBA also boosted the outlook for Australian growth to 4.75% this year and 3.5% in 2022. It also expects the unemployment rate will fall to 5%.
The rate decision came a day after data by Markit revealed that the manufacturing sector continued to expand in April, helped by higher demand. It also came at a time when a commodity boom is going on. Last week, the price of iron ore surged to a record high as demand from China continued.
Meanwhile, the boom in the property market has continued, with prices surging in places like Sydney and Melbourne. The bank said:
“Given the environment of rising housing prices and low-interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”
Further, the RBA decision came a few hours after the Australian Bureau of Statistics (ABS) reported the latest trade data. Exports declined by 2% in March to more than A$38 billion while imports rose by 4% to A$32.7 billion. As a result, the rade surplus declined by more than A$2 billion to A$5.5 billion. Exports and imports are expected to remain at elevated levels as the country reopens.
AUD/USD forecast
The four-hour chart shows that the AUD/USD pair has formed a rectangle pattern in the past few days. The support and resistance levels of this pattern are at 0.7697 and 0.7816, respectively. The pair remains between the 23.6% and 38.2% Fibonacci retracement levels. It is also slightly below the 25-day and 15-day exponential moving averages (EMA). Therefore, the pair will likely remain in this channel in the near term and then make a bullish breakout. For this to happen, bulls will need to move above the resistance at 0.7800. You can trade this price action using a high leverage forex broker.
