RBA warns on housing debt & strong A$, AUD/JPY drops below 1-hour 50-MA

RBA kept the policy rates unchanged as expected and retained the relatively weaker tone, which seems to have disappointed the Aussie bulls. 

The AUD/JPY has take out the 1-hour 50-MA support of 86.43 and was last seen trading around 86.30 levels.  

RBA avoids going the ECB-way

The price action suggests a significant majority in the market was expecting the RBA to sound hawkish. However, the RBA has retained the neutral tone. 

The central bank warned about housing debt levels and signs of cool down in the housing market. It added further that wage growth remains low and is likely to remain so for a while. RBA also warned about the negative impact of the strong Australia dollar. 

Aussie 10-year yield drops 5 basis points

The benchmark bond yield is down 5 basis points, which explains the losses in the AUD after the RBA rate decision. 

AUD/JPY Technical Levels

A break below 86.12 (1-hour 100-MA) would open doors for a drop to 85.84 (Feb 27 low) and 85.43 (10-DMA). On the higher side, a move back above 86.43 (1-hour 50-MA) would shift risk in favor of a rise of 87.03 (100% Fib ext. of June 6 low - June 20 high - June 22 low) and 87.49 (Mar high).