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The FxPro Analyst Team

AUDUSD Tests Uptrend Line Support after a Noticeable Retracement

Early this morning (03:30 GMT February 7th) the Reserve Bank of Australia (RBA) announced that interest rates will remain unchanged at a record low of 1.5%, in line with expectations, as the RBA expects no further QE in other major economies.

The RBA implied that, in the short term, there will not be a further rate cut with rates likely to remain at the current level.

The RBA expects a 3% annual economic growth over the next couple of years. At present inflation is still lower than its 2% target, however the RBA expects inflation would reach the target this year.

After the announcement the ASX 200 index fell by 0.12%.

On the 4 hourly chart, AUDUSD retraced more than 70 points with a long bearish candle, as it was trading below the long term major resistance level at 0.7700, and also because of the strengthening of the dollar.

At present the price still holds above the short term major uptrend line support. However pressure above the level 0.7680 is heavy.
On the daily chart, the Stochastic Oscillator is crossing over from above, suggesting a further retracement.

The resistance level is at 0.7630, followed by 0.7650 and 0.7680.
The support line is at 0.7600, followed by 0.7580 and 0.7560.

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