We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
Australian Dollar Tumbles After Dovish RBA Despite Unchanged Rate Cut Bets

Australian Dollar Tumbles After Dovish RBA Despite Unchanged Rate Cut Bets

2019-04-02 21:09:00
Rich Dvorak, Junior Analyst
Share:

AUDUSD – TALKING POINTS

  • AUDUSD cratered following the release of the Reserve Bank of Australia’s latest monetary policy statement which included a dovish change to language compared to the central bank’s prior statement
  • According to OIS futures implied interest rate probabilities, markets have held expectations for a rate cut relatively unchanged
  • Sharpen your trading skills with this free educational guide discussing the Traits of Successful Traders

The Reserve Bank of Australia announced its decision to leave interest rates unchanged at 1.50 percent with added dovish language which has put downward pressure on AUDUSD throughout today’s session. However, the move lower in AUDUSD could be exaggerated when considering the muted reaction in Australian OIS interest rate probabilities after the RBA released its latest monetary policy statement.

AUSTRALIA OIS INTEREST RATE PROBABILITIES OF 25 BASIS POINT CUT TO OCR

AUD Price Chart Australia Interest Rate Probability After RBA April Meeting

While the futures implied odds of a 0.25 percent cut to the RBA’s Overnight Cash Rate ticked up across the board headed into the central bank’s meeting today, probabilities returned to levels seen in mid-March when AUDUSD traded near the 0.7150 handle. Spot AUDUSD prices are now trading around the 0.7069 area.

AUDUSD CURRENCY PRICE CHART: 4-HOUR TIME FRAME (MARCH 07, 2019 TO APRIL 02, 2019)

AUDUSD Currency Price Chart

Further dovishness by the RBA could have been interpreted from the shift in language from keeping rates ‘unchanged which is consistent with sustainable growth’ last month to ‘setting policy to support sustainable growth in the economy’ today. Moreover, the RBA’s statement added that “growth has slowed and downside risks have increased.”

Although, Australia’s labor market remains strong with the unemployment rate dropping to 4.9 percent – the lowest reading since June 2011 – which has led to an uptick in wage growth. Also, Australian building permit data shattered expectations today with a reading of 19.1 percent month-over-month growth in February compared to estimates of -1.8 percent.

That being said, AUDUSD now rests at technical support at the 61.8 percent Fibonacci retracement line shown in the chart above. AUDUSD has traded in a relatively tight range between this level and March’s high. With the RBA now in the rearview mirror and little reaction shown in future rate cut expectations, the Australian Dollar has potential to rebound higher from today’s selloff. This could especially be the case if economic data continues to improve. Nevertheless, strength in the US Dollar could serve as a major headwind for further AUDUSD advances.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.