During a recent (April) meeting, the RBA kept its key interest rate at 0.10%, but radically revised its forecasts, acknowledging that the economy is performing much better than the bank expected. In an accompanying statement, the RBA omitted the words "ready to remain patient" and announced that it would closely monitor incoming data on wage growth and inflation and, based on them, determine the parameters of monetary policy.
Coming out next week (Wednesday at 01:30 GMT) 1st quarter inflation data (published by the RBA and re-published by the Australian Bureau of Statistics) will be critical to determining the dynamics of RBA policy. Australian annual consumer inflation is expected to slow to 2% (from 3.5% in Q4 2021).
A slowdown in inflation and its reduction in the target range of 2%-3% is likely to force the central bank to continue to take a wait-and-see attitude.
If the protocol published tomorrow (at 01:30 GMT) contains unexpected information regarding RBA monetary policy issues, then the volatility in AUD quotes will increase.
AUD/USD declined on the strength of the USD and reached the important support level of 0.7365 by now. AUD still maintains a strong position against the backdrop of rising energy and commodity prices. Some decrease in AUD/USD is still possible, to the key support level of 0.7330.
Our main scenario would be to enter long positions from current levels with their strengthening near the 0.7330 support level. More cautious purchases of AUD/USD will be associated with the breakdown of the resistance levels of 0.7403, 0.7439.
Support levels: 0.7365, 0.7330, 0.7300, 0.7200, 0.7175, 0.7100, 0.7085, 0.7037, 0.7000, 0.6970
Resistance levels: 0.7403, 0.7439, 0.7465, 0.7510, 0.7555, 0.7615, 0.7660, 0.7730, 0.7815, 0.7835, 0.7885, 0.7900, 0.8000
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Source: InstaForex
