AUD/USD: Bears back in control, eyes 0.7600 on RBA disappointment

The AUD/USD pair witnessed volatile moves following the announcement of the RBA’s policy decision, reversing sharply from an initial knee-jerk spike to 0.7683 levels.

The bears fought back control and triggered a fresh sell-off in AUD/USD after the sentiment around the AUD was hit by no hawkish hints from the RBA’s policy statement.

The RBA left the cash rate unchanged at record low of 1.5%, while maintaining the neutral bias, as against wide expectations of a shift in gear towards a more hawkish narrative, especially after former RBA board member Edwards noted last week: “It seems to me that something like eight quarter percentage point tightenings over 2018 and 2019 are distinctly possible.”

Meanwhile, markets will digest the disappointing RBA policy statement, however, upbeat Aus retail sales data could continue to lend some support to the Aussie bulls. In the day ahead, trading is expected to remain light as the US markets remain closed in observance of Independence Day holiday.

AUD/USD Levels to watch   

At 0.7632, the pair finds the immediate resistance at 0.7700 (key resistances) above which gains could be extended to the next hurdle located 0.7716/19 (Jun 30 high/ classic R2) and 0.7750 (mid-Mar tops). On the flip side, the immediate support is located at 0.7606/00 (20-DMA/ round figure). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7574 (Jun 28 & 27 low) and below that 0.7550 (psychological levels).