The Reserve Bank of Australia decided to leave the key interest rate unchanged (4,75%), which disappointed the market. As a result, the futures of the Australian Dollar (6AM1) lost almost 1% during the Asian trading session.
The daily chart shows that the market is confident in the Aussie’s strength. The downward sloping channel is broken, the price has consolidated above $1,068 - the local high. The panic seen during the Asian session made the price retrace a little even though the overall picture still looks positive.
Probably, the European and American marketplaces won’t be as pessimistic about the Aussie’s perspectives.
The professional traders from the Department of Market Sentiment Analysis of note that if the price gets back to $ 1.0692 and consolidates above it while the market is strong, the Aussie may rally. $1,071 will be the closest target.
If the price keeps declining while the market is weak, the closest support level will be found at $1,0474.
It should be reminded that the monthly meetings of the RBA are aimed at maintaining the balance between the prices and the inflation level by varying the short-term interest rate. If the inflation rate exceeds the limit the interest rate is raised, which also makes the Australian Dollar more attractive for foreign investors.
