When is the RBA and how could it affect AUD/USD?

The Reserve Bank of Australia (RBA) is likely to keep interest rates on hold at 1.5% for a 17th consecutive meeting, due at 03:30GMT. “The OIS strip is extremely flat, the market increasingly of the view the RBA is highly unlikely to lift the cash rate before the Nov meeting”, according to TDS Analysts. Also,  we are unlikely to see any significant change in the Governor’s rhetoric from last month, according to Analysts at Westpac.

So the rate decision will likely be a non-event from the markets. That said, investors will focus on changes within the policy statement. However, the RBA has very little reason to change their neutral policy bias, according to Kathy Lien from BK Asset Management, given the economy seems to have lost traction since the last meeting in February.

How could the RBA decision/statement affect AUD/USD?

The pair could witness a corrective rally, given the multiple “long-tailed” daily candles at 0.7744 – 61.8 percent Fibonacci retracement of Dec-Jan rally. Also, the relative strength index (RSI) seems to have bottomed out at 37.00. That said, the downward sloping (biased bearish) 10-day moving average (MA) could cap gains. As of writing, the spot is trading at 0.7778.

Valeria Bednarik, Chief Analyst at FXStreet says, “the risk leans towards the downside, according to 4-hours chart as technical indicators remain within the negative territory, while a bearish 20 SMA caps advances, now acting as an immediate resistance at 0.7775.”

About the RBA interest rate decision 

The RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.