The Reserve Bank of Australia (RBA) just announced their interest rate decision in today’s Asian trading session, leading to a flurry of forex trading tips from market watchers. The central bank kept interest rates on hold at 2.50% as expected and gave additional comments on their assessment and outlook for the Australian economy.
RBA Governor Glenn Stevens noted that the weakening labor market could still use a little more support from a longer period of low interest rates. Even though the Australian economy added a higher than expected number of jobs in February and maintained its jobless rate at 6%, Stevens hinted that the jobless rate might still rise later on. This suggests that an interest rate hike isn’t likely to take place in the coming months.
On a brighter note, this also suggests that a rate cut isn’t probably going to happen either. After all, Stevens also pointed out that the impact of the recent easing efforts is just staring to get manifested in the housing sector, which has seen a considerable pick up in building approvals.
Another issue that came up was the Aussie’s exchange rate. Stevens mentioned that the appreciating currency is lessening the positive impact of their easing efforts in the past months, as the Australian dollar is still trading at historically high levels, leading to trading tips to sell the pair.
AUD/USD Forex Trading Tips
On that note, AUD/USD might be in for a weaker uptrend in the near term, as traders try to reposition after the central bank’s cautious comments. While the Australian dollar might not see extended gains against the dollar, it could still be a buy against lower-yielding currencies like the yen or those that are facing the prospect of further easing, like the euro.
Other trading tips from market experts include buying AUD/USD on a retracement to the .9150 minor psychological resistance. However, short-term traders might be a little more wary as the pair is forming a double top on its 1-hour chart.
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