4 Feb 2014
AUD buyers take full control post RBA
FXStreet (Bali) - The AUD is enjoying consistently positive order flows after the decision by the RBA to leave rates unchanged, with the accompanying statement providing some important clues over the next course of action in interest rates.
To summarize the key points, the RBA confirmed further rate cuts are off the table for now, saying "on present indications, the most prudent course is likely to be a period of stability in interest rates." That being said, expectations for immediate rate hikes are still quite moderated.
One of the key inputs allowing the Aussie to find further buying interest was the omission of any reference to the Australian dollar being overvalued. In the past, the RBA had been emphasizing in every single statement the fact that the domestic currency remained at 'undesirable high levels.'
Should further follow through in AUD/USD be seen - up over 1 cent since RBA - it is likely that stops-loss orders above 0.8890 get targeted in late Asia/early Europe. Before escalating further though, an important level comes at 0.8870, where the daily kijun comes at.
To summarize the key points, the RBA confirmed further rate cuts are off the table for now, saying "on present indications, the most prudent course is likely to be a period of stability in interest rates." That being said, expectations for immediate rate hikes are still quite moderated.
One of the key inputs allowing the Aussie to find further buying interest was the omission of any reference to the Australian dollar being overvalued. In the past, the RBA had been emphasizing in every single statement the fact that the domestic currency remained at 'undesirable high levels.'
Should further follow through in AUD/USD be seen - up over 1 cent since RBA - it is likely that stops-loss orders above 0.8890 get targeted in late Asia/early Europe. Before escalating further though, an important level comes at 0.8870, where the daily kijun comes at.