AUDUSD is leading gains among the majors after the RBA keep its interest rates unchanged and scaled back its QE program. As of this writing, the currency pair is up by 0.39% or 25 pips at 0.6449.
Just as expected, the central bank followed suit with the Federal Reserve and FOMC. The RBA kept its interest rates steady at 0.25%. With this decision came the forward guidance which indicates that no increase will happen until inflation is between the 2%-3% range and there is full employment in Australia. In addition, the central bank announced that it would scale back its bond-buying program, which has totaled to 50 billion AUD, as the country’s bond market has improved.
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Most of what was said in the RBA statement had already been anticipated by market participants. This is why the reaction on AUDUSD was muted. Within fifteen minutes of the central bank decision, the currency pair tapped a high of 0.6450 and a low of 0.6434.
On the 1-hour time frame, it can be seen that AUDUSD is finding support at the 200 SMA. With the most recent candlestick closing as a hammer, it could be a sign that there are enough buyers in the market to push the currency pair higher to near-term resistance at 0.6475.
This price corresponds with the previous trendline which could act as a ceiling for AUDUSD. However, if there are enough buyers in the market, the currency pair could rally past this level and maybe even tap its April 30 highs at 0.6570.
On the other hand, a strong close below the 200 SMA on the 1-hour time frame could mean that the currency pair is headed lower. Near-term support is at 0.6374 where AUDUSD bottomed on May 4.