RBA Holds Rates Steady-AUD/USD Rallies
Shain Vernier • 1 min read
The markets appear to be back at full strength after the Easter holiday. The forex is opening up a bit, with several of the majors on the move. The Reserve Bank of Australia (RBA) held the course last night, keeping rates steady at 1.5%. With only a few secondary metrics being released pertaining to the USD this morning, traders have elected to take a long bias to the AUD/USD.
In a live market update from yesterday, I outlined a few scenarios facing the Aussie and the RBA Interest Rate Decision. Let’s take a look at the daily technicals and identify where this market is heading amid the RBA’s aftermath.
Simply put, the Aussie continues to trade in heavy rotation. A key topside resistance level has held, with the .7700 handle bringing bears to the market in droves.
Here are the levels to watch for the remainder of the session:
- Resistance(1): 38% Retracement Current Wave, .7696
- Resistance(2): 20 Day EMA, .7728
- Resistance(3): Bollinger MP, .7747
Bottom Line: After the early session rejection of the 38% Fibonacci retracement, the AUD/USD looks to have settled into a consolidation pattern. This market is poised for a breakout from the .7700 – .7650 area. In the event that the intraday high of .7706 holds up, a bearish break below .7650 is probable for the near future.
For the rest of the session, I will be looking to sell the 20 Day EMA from .7724. This number is well above the .7700 handle, but it provides a positive entry with the prevailing trend. Using an initial stop loss at .7751, this trade yields 27 pips using a 1:1 risk vs reward management plan.