Hourly Chart
AUD/USD Hourly Chart" title="AUD/USD Hourly Chart" height="654" width="1024">
The Reserve Bank of Australia held rates as expected today; keeping policy rate at 2.50%. In the accompanying statement, Governor Glenn Stevens repeated last month's statements almost verbatim, once again saying that "full effects" of previous rate cuts are still working their way into the economy, which will last "for a while yet" - suggesting that RBA may not be pushing for additional rate cuts in the next few months. Besides talking about interest rates, Stevens also highlighted the "uncomfortably high" AUD, saying that a lower AUD is needed "to achieve balanced growth in the economy".
All these are not new though, hence it is interesting to see the immediate bearish reaction in AUD/USD which sent prices from 0.909 to 0.9068. Prices did recover shortly after, but this quick reaction to basically nothing showed the underlying bearishness that is plaguing AUD/USD right now.
What is more interesting however, is the fact that prices actually rallied in the hours that followed despite the supposed bearishness. This suggest that the previous assertion requires a rethink, and looking a historical price action, it seems that prices may simply be more influenced with technicals more so than being inherently bearish - with prices rebounding off the Top and Bottom within the descending Channel. The "bearishness" that was observed when RBA rate announcement was made can be interpreted as technical bears seeking Channel Bottom finding excuses to sell into.
If the above assertion is true, then the likelihood of prices rebounding off Channel Top increases, and we could see prices heading towards Channel Bottom once again during US session today. However, it should be noted that Stochastic readings are in the midst of a bullish cycle, and there is no evidence of this bullish cycle slowing down. Hence, a Channel Top break cannot be ruled out, and traders seeking a bearish rebound may have to wait for price to hit the 0.913 resistance
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