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3 Mar 2015
AUD/USD sold at 0.7840; long short-term but 0.7000 in the long distance
FXStreet (San Francisco) - After rallying 90 pips from 0.7750 amid the RBA's decision to maintain unchanged its interest rates at 2.25%, the AUD/USD found a selling interest at 0.7840 that sent the pair back to 0.7820.
Currently, AUD/USD is trading at 0.7827, up 0.80% on the day, having posted a daily high at 0.7840 and low at 0.7752. The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish.
As FXStreet Asian Session Manager Ivan Delgado reported earlier in the day, the AUD/USD "was the top performing currency in Asia," as investors bought the no-move as a bullish hint. However, as Delgado remarked, the RBA left the door open "for further easing this year was left wide open."
A pause in a loosening cycle
In the same line, Chief Australia & NZ Economist at Capital Economics Paul Dales commented that despite expectations that the RBA would cut another time its interest rate, the board appeared "to have been concerned that back-to-back cuts would stoke the housing market by more than it could stomach and may create a sense of panic that could reduce confidence."
Analysts at Capital Economics think that today's RBA decision is "just a pause in a loosening cycle." Thus, the firm affirmed that "Australian rates are still likely to be cut to 1.5% this year." In this scenario, Dales expects the AUD/USD to weaken to 0.7000 in the long term.
AUD/USD sentiment
Last week in the FXStreet Forecast Poll, analysts at Growth Aces forecasted the unchanged decision in the RBA as they thought the "RBA is likely to wait with a cut for more data (especially CPI for the first quarter that will be released on April 22) at least to its May meeting."
As for the short term, Growth Aces considers that the "AUD/USD may benefit from an on-hold decision." They are maintaining its long AUD/USD position taken at 0.7805. In their opinion "breaking above the 0.8000 level cannot be excluded in the short term."
In terms of levels, a break above 0.7840 will led the pair to 0.7900 and 0.7940. To the downside, supports are at 0.7820, 0.7790 and 0.7750.
Currently, AUD/USD is trading at 0.7827, up 0.80% on the day, having posted a daily high at 0.7840 and low at 0.7752. The hourly FXStreet OB/OS Index is showing overbought conditions, alongside the FXStreet Trend Index which is slightly bullish.
As FXStreet Asian Session Manager Ivan Delgado reported earlier in the day, the AUD/USD "was the top performing currency in Asia," as investors bought the no-move as a bullish hint. However, as Delgado remarked, the RBA left the door open "for further easing this year was left wide open."
A pause in a loosening cycle
In the same line, Chief Australia & NZ Economist at Capital Economics Paul Dales commented that despite expectations that the RBA would cut another time its interest rate, the board appeared "to have been concerned that back-to-back cuts would stoke the housing market by more than it could stomach and may create a sense of panic that could reduce confidence."
Analysts at Capital Economics think that today's RBA decision is "just a pause in a loosening cycle." Thus, the firm affirmed that "Australian rates are still likely to be cut to 1.5% this year." In this scenario, Dales expects the AUD/USD to weaken to 0.7000 in the long term.
AUD/USD sentiment
Last week in the FXStreet Forecast Poll, analysts at Growth Aces forecasted the unchanged decision in the RBA as they thought the "RBA is likely to wait with a cut for more data (especially CPI for the first quarter that will be released on April 22) at least to its May meeting."
As for the short term, Growth Aces considers that the "AUD/USD may benefit from an on-hold decision." They are maintaining its long AUD/USD position taken at 0.7805. In their opinion "breaking above the 0.8000 level cannot be excluded in the short term."
In terms of levels, a break above 0.7840 will led the pair to 0.7900 and 0.7940. To the downside, supports are at 0.7820, 0.7790 and 0.7750.