AUD/USD fell on Tuesday as the Reserve Bank of Australia (RBA) kept the benchmark interest rate unchanged at 2.5%; the pair is expected to resume downtrend towards 0.8780 in near future.
As of this writing, the pair is being traded around 0.8930. Immediate resistance is being noted near 0.8970-90 which is a confluence of 61.8% fib level and 100 Daily Moving Average (DMA), a break above the resistance area shall expose 0.9045 that is 76.4% fib level.
On downside, immediate support can be seen near 0.8900 which is a confluence of 55 DMA, 50% fib level as well as psychological level. A break below 0.8900 handle, shall threaten 0.8781. Both Relative Strength Index (RSI) and Commodity Channel Index (CCI) are above the oversold zone which means more dips might be in play.
Today, RBA kept the overnight lending rate steady at the record low level of 2.5% and said in the monetary policy statement that the central bank wanted to see Aussie Dollar (AUD) depreciating against the greenback and other major currencies. Minutes after the release of monetary policy statement, Australian Dollar –which was consolidating around 0.9000 handle—fell more than 50 pips.
RBA governor Glenn Stevens said the weaker currency will help the economy achieve steady growth. Overall the whole monetary policy statement was very dovish for the AUD/USD, so I expect considerable downside movement in the pair during the next few days.
It is pertinent that tomorrow at 00:30 GMT, Australian Bureau of Statistics (ABS) is scheduled to release the country’s Gross Domestic Product (GDP) report for the fourth quarter. According to the median projection of different analysts, the Australian economy grew at 2.5% in the fourth quarter as compared to 2.3% growth in the same quarter of the year before. A better than expected actual outcome will be bullish for AUD/USD and vice versa.