The Australian dollar accelerated to a one-week high (0.7599) in early Tuesday, signaling that near-term bulls from a new multi-month low at 0.7444 (July 2) tighten grip despite the RBA’s dovish stance on today’s policy meeting.
The Reserve Bank of Australia kept its cash rate unchanged and reiterated the need for the current setting to remain unchanged until 2024 to help spark inflation and wage pressures.
The central bank will also continue purchasing government bonds after the deadline in September but announced a reduction in weekly purchases from A$5 billion to A$ 4 billion.
The first step in tapering RBA’s massive stimulus on improving situation in Australia’s labor sector is a positive signal, however, any changes in the current policy are unlikely to come to central bank’s agenda until goals in inflation and employment will be reached.
Fresh bullish acceleration broke through pivotal barrier at 0.7570 (200DMA), with a daily close above here to confirm the bullish signal.
Breach of next key level at 0.7616 (June 25 lower top / Fibo 38.2% of 0.7890/0.7444) would add to reversal signal and open way for acceleration towards 0.7700/20 (100DMA/Fibo 61.8%).
Bullish divergence on daily chart momentum studies and north-heading indicators support the notion.
Only return and close below 10DMA (0.7542) would signal recovery stall and sideline fresh bulls.
Res: 0.7598, 0.7616, 0.7634, 0.7667.
Sup: 0.7568, 0.7541, 0.7520, 0.7476.
