RBA Cuts Rates. AUD Declines
Today, the Reserve Bank of Australia (RBA) decided to cut the interest rate from 4.10% to 3.85%, continuing its easing policy after a previous cut from 4.35% in February.
According to Reuters, the RBA today cited:
progress made in bringing inflation under control;
economic risks linked to the ongoing global trade war.
Although the RBAs decision was widely expected, the Australian dollar weakened noticeably against other currencies including the New Zealand dollar. The AUD/NZD rate fell to its lowest level in nearly two weeks.
Technical Analysis of the AUD/NZD Chart
From a technical perspective, a bearish breakout occurred:
below the lower boundary of the upward trend channel that began in April;
and below the 1.087 level, which had served as support in mid-May.
It is possible that:
the decline may slow around the 1.083 support zone, where strong demand was evident in the long lower wicks of the 9 May candles (marked with an arrow);
the 1.08701.0880 area will act as resistance going forward, potentially leading to a retest of the bearish breakout zone on the AUD/NZD chart.
As the market continues to price in the RBAs decision, attention will turn to the Reserve Bank of New Zealand meeting on 28 May, where a similar rate cut could be on the table.
Read more: https://fxopen.com/blog/en/oa-rba-cuts-rates-aud-declines/
Text source: Forex Trading Blog
