FxWirePro: AUD/USD Spikes As Markets Price Out Rate Cuts Post Publication of RBA Minutes
- Minutes of the May 3rd RBA meeting were not as dovish as expected, AUD/USD spiked past the 0.73 handle.
- Minutes revealed that "members discussed the merits of leaving interest rates on hold but decided on balance that a cut would help return inflation to target over time.
- Markets currently pricing out RBA rate cuts post publication of minutes, expect a potential more cautious approach towards cutting rates again.
- Technically, on the 4H charts the pair has broken strong trendline resistance at 0.7285, and has hit session highs at 0.7366.
- Upside finds stiff resistance at 0.7375 (4H 55-EMA), further upside only on breaks above.
- Above 0.7375 the pair finds next resistance at 0.74, 0.7457 (4H 110 EMA) and then 0.7380 (May 12th highs).
- Currently the pair has given up some gains to trade at 0.7347 levels, with supports on the downside located at 0.7258 (200-DMA) and further below at 0.7212 (61.8% Fib of Jan to Apr rally).
- Close below 200-DMA at 0.7259 will see test of 0.7212. Break below could see test of 0.7043 (78.6% Fib).