AUD/USD: Key Levels to Watch After RBA April Meeting's Minutes

Summary:

AUD/USD is trading higher as a reaction to the RBA April meeting's minutes. A weakening US dollar is also driving the rally.

AUD/USD is trading higher as a reaction to the minutes of the RBA meeting on April. The Australian central bank is keen on maintaining an accommodative policy until it is able to stabilize inflation within the targeted range of between 2% and 3%; which may take till 2024. In its April meeting, it left interest rates unchanged at the record low of 0.1%.

Australia’s labor market reflects the country’s V-shaped recovery. According to data released in the past week, unemployment declined by 5.6% in March as employment rose by over 70,000. However, investors are keen on how the Australian dollar will be impacted by the recent expiry of the JobKeeper program in the ensuing months. The housing market is also of major concern to the RBA after housing prices soared in March to the highest level since 1988.

AUD/USD is also reacting to the weakening US dollar. The greenback remains on a downward momentum; trading at its lowest level since early March at 90.95. This follows the decline in US treasury yields. While the benchmark 10-year bond yield is trading higher at 1.62, it remains on its 3-week long downtrend.

AUD/USD Technical Outlook

AUD/USD has recouped Monday’s losses and surged even higher following the release of the RBA April meeting’s minutes. The pair is up by 0.48% at 0.7792 after dropping to 0.7750 in the previous session. Besides, on an hourly chart, it is trading above the 25 and 50-day exponential moving averages.

With the bullish outlook, AUD/USD is likely to push past the ascending trend line highlighted in green. However, it may experience some resistance at 0.7800 before gaining enough momentum to move higher. On the upper side, the next targets will be 0.7851 and the psychological 0.8000. These levels will be its highest since 18^th March and the three-year high hit on 25^th February respectively.

On the flip side, the bears may manage to push the pair back to yesterday’s low at 0.7750. A move further down will place the next support level at 0.776.