The AUD/USD price was under pressure in the morning session after the latest Reserve Bank of Australia (RBA) interest rate decision. The pair dropped to 0.7265, which was lower than this week’s high of 0.7300.
RBA decision
The RBA concluded its two-day monetary policy meeting on Tuesday morning. In the statement, the bank decided to maintain its cash rate target at 0.10% and the main interest rate at zero per cent.
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The bank also decided to maintain the target of 10 basis points for the April 2024 government bond. Earlier on, some analysts were expecting the bank to push the target to the November 2024 bonds.
At the same time, the RBA decided to keep purchasing government securities at the rate of A$4 billion per week until February 2022.
In the statement, Governor Philip Lowe lamented that the new outbreak had a major impact on the Australian economy. However, he expect that the impacts will be temporary as the country boosts its vaccination rates. He expects that the bank will leave interest rates intact until the country’s inflation rises. He said:
“It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. The central scenario for the economy is that this condition will not be met before 2024.”
The AUD/USD pair also reacted to the latest economic data from Australia. The numbers showed that the country’s exports rose by 4% in August while imports retreated by about 1%. The AIG construction index rebounded from 38.4 in August to 53.3 in September.
AUD/USD forecast
The hourly chart shows that the AUD/USD pair has been under pressure after the dovish rate decision by the Reserve Bank of Australia. The pair has dropped below the key resistance level at 0.7310. It is also along the 25-day and 50-day moving averages. The MACD has also been on a downward trend.
Therefore, the pair will likely rebound in the near term. If this happens, the next key resistance level to watch is 0.7310, which was the highest level in September. A move above this resistance will see the price jump to the next level at 0.7350.
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