The AUDUSD falls with the overall USD buying today but is seeing a bounce higher

The AUDUSD moved lower in the Asian and early European session. The move may be attributed to overall USD buying The RBA did meet and announced no change in policy. In the statement, the central bank did take out that a further hike “cannot be ruled out”

Now they say:

  • “The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out”.

In her press conference, RBA Governor Michelle Bullock provided an update on Australia’s monetary policy and the ongoing battle against inflation. She acknowledged progress in addressing inflation, though it remains elevated, suggesting that recent data indicates movement in the right direction. Bullock stressed the need for greater confidence that inflation would return to the target within a reasonable timeframe, describing the risks to the economic outlook as “finely balanced.” She highlighted a shift in the Reserve Bank of Australia’s (RBA) language regarding future guidance, reflecting a data-driven approach to policy decisions. Despite not having sufficient confidence to dismiss any potential interest rate adjustments, Bullock expressed optimism about being on the path to achieving inflation targets.

Bullock also elaborated on the dynamic nature of the economic environment, indicating that the RBA is actively responding to incoming data. She reiterated the presence of risks on both ends of the policy spectrum, with inflation still above the target and services inflation remaining high, contrasting with signs of slowing consumption and easing labor market tightness. Given these conditions, Bullock emphasized that the RBA cannot definitively rule any policy actions in or out at this stage, underlining the necessity for increased confidence in inflation’s downward trajectory before considering rate cuts.

In the US session, the USD is starting to see some selling. Yields are lower with the 10-year down -3.4 basis points. That has taken the pair back above a swing level at 0.6523.

Now there is plenty of resistance on the topside which is outlined in the video above. So buyers and sellers are now more in balanced but sellers have made a play today. Can they stay below resistance now?

This article was written by Greg Michalowski at Source