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AUDUSD ahead of the RBA Cash Rate decision

31 March 2023 By GO Markets

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This week, the Australian Consumer Price Index (CPI) y/y data was released at 6.8% (Forecast: 7.2% Previous: 7.4%) which signals a slowdown in inflation growth. In addition, the consecutive release of lower-than-expected CPI data highlights the possibility of a new trend of decreasing inflation for the Australian economy.

With the view that inflation has peaked and is possibly on a downturn, the Reserve Bank of Australia (RBA) could decide to pause further rate hikes at its upcoming cash rate decision on Tuesday next week. Keeping interest rates at 3.60% could lead to the AUDUSD trading slightly lower.

The AUDUSD is currently trading between the key resistance level of 0.6765 and the support level of 0.6565, with the formation of a bearish pennant. If the AUDUSD maintains below the resistance level, look for a potential breakout to the downside, to retest the key support level of 0.6565. This move lower could be driven by the recovery in strength on the DXY and if the RBA decides to hold interest rates at 3.60%.

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Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.