The Australian Dollar (AUD) dripped after the Reserve Bank of Australia (RBA) held its interest rate steady at the record low of 1.5%. The RBA is waiting for signs of wage growth which should improve consumer spending and support inflation. The RBA statement comes after a data release yesterday showing Australian retail sales rising faster than was expected during April. Important economic data in the shape of first-quarter GDP growth will be released on Wednesday. However, the RBA is not expected to hike rates until mid-2019 and so the policy divergence with the U.S. Federal Reserve will exert bearish pressure on the Aussie.
AUDUSD
On the daily chart, the AUDUSD recovery has run into trend line and horizontal resistance at 0.7660. A break of this level could see additional upside to resistance at 0.7730 and 0.7800. However, if the resistance holds, the pair could resume the longer term downtrend with supports at 0.7600 and then 0.7560.
AUDJPY
The sharp rally in AUDJPY over the past month has, once again, stalled at 84.00. In the daily timeframe, AUDJPY needs a decisive break of the 84.00 level to open the way for continued upside to resistance at the 50% retracement of the highs from January at 84.80 followed 85.90. On the flip-side, a bearish reversal from 84.00 could see declines towards 81.20 with support at 83.30 and 82.60.
