FXStreet (Mumbai) – The AUD/USD pair failed to sustain the RBA announcement induced 30-pips knee-jerk rally and dropped sharply to hit fresh session lows below 0.71 handle as the central banks’ easing bias weighed on the Aussie.
AUD/USD gives up almost 50-pips post-RBA
Currently, the AUD/USD pair trades -0.35% lower near fresh session lows of 0.7084 reached last minutes, having posted session highs at 0.7129 immediately after the RBA decision. The Aussie quickly surrendered all gains and turned sharply lower as RBA statement raised concerns over the inflation and employment outlook in wake of the global financial markets turbulence. The central bank also left doors open for further easing if required on the back of external headwinds.
In the last hours, the Aussie spiked to 0.7129 highs in a knee-jerk reaction to the RBA’s rates-on hold decision, having kept the cash rate unchanged at 2.0%. Moreover, markets boosted the prices after the central bank maintained that the AUD continued to adjust in line with the lower commodities’ prices.
Meanwhile, markets will continue to digest the RBA policy announcement as focus now turns towards key economic updates from Australia as well as the US in the week ahead.
AUD/USD Levels to watch
The pair heads higher and finds the immediate resistance at 0.7150/58 (round number/ 100-DMA) above which gains could be extended to the next hurdle located at 0.7175/0.7200 (daily R2/ psychological levels). On the flip side, the immediate support located at 0.7044/24 (10-DMA/ 1h 200-SMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7004/0.7000 (Jan 28 Low/ round number).
(Market News Provided by FXstreet)