The Reserve Bank of Australia announced the rate decision overnight. The main interest rate was hiked by 25 basis points to 3.60%, in-line with market expectations. This is the highest level since May 2012. However, judging by the reaction of the market, the decision was seen as dovish as the Australian dollar is now the worst performing G10 currency.
While the RBA rate decision today was in-line with market expectations, the accompanying statement was seen as dovish. RBA removed wording that further rate increases are needed and replaced it with a hint that further tightening is likely. The Bank warned that while it is trying to bring inflation back to 2-3% range and keep the economy on track, the path to the so-called 'soft landing' remains limited.
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Create account Try a demo Download mobile app Download mobile appTaking a look at AUDJPY chart at D1 interval, we can see that the pair is making a break below the 91.00 support zone today. However, traders should keep in mind that it is not the first time when the pair is attempting to break below the 91.00 support - two recent attempts turned out to be a failure (orange circle). Should the ongoing attempt be successful, the next potential support to watch can be found in the 90.10 area, where the lower limit of the upward channel currently runs.
Source: xStation5
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