AUD/USD tests its 100-hour moving average near 0.7400
Things are starting to get interesting for AUD/USD as the pair slips further on the session to 0.7405-15 levels now, pressured into a test of its 100-hour moving average (red line) @ 0.7410 in European morning trade.
For buyers, they need to keep above that in order to maintain a more bullish near-term bias. Fall below and the bias turns more neutral instead.
The late-July and early-August highs around 0.7413-26 are also being challenged at the moment on the daily chart with the 0.7400 a key psychological level to watch in that regard, as that will allow sellers to pile on more pressure in the sessions ahead.
While the RBA tried to make the most out of a bad situation, the play on the optics looks to be coming off wrongly now that the market has had some time to digest the situation. In case you missed the commentary from earlier:
Essentially, today's decision avoids the look that they are sitting on their hands but it also seemingly looks like they are firm with their policy stance set out to taper.
But when you take a step back and review, does it really amount to much? I'm not sure. If anything else, I'd argue that this is perhaps a more ‘indecisive' take by the RBA.
The aussie may have jumped on the initial reaction but I think traders are getting a little too ahead based on the optics of the entire decision.
If you look more closely, this is the RBA still signaling that it isn't changing its overall policy stance and shifting towards a more bullish outlook any time soon.
While the aussie has shown remarkable resilience in the past two weeks, the fact that the RBA does not know which boat it wants to step foot on makes it tough for buyers to be reassured today – not least with the virus situation still rather tense.