April 16, OctaFX – The Australian dollar weakened sharply against the USD after the Reserve Bank of Australia (RBA) released meeting minutes.
The minutes showed that officials were considering a rate cut if inflation did not move higher and unemployment rose. In these circumstances, officials said that a rate cut from the current 1.50% would be necessary. Presently, the unemployment rate is at an eight-year low of 4.9% while inflation is slightly below the 2% target.
AUDUSD technical analysis
The AUDUSD pair declined sharply after the RBA left open the likelihood of a rate cut. The pair reached a low of 0.7138, which was the lowest level since Friday last week. It is also close to the 61.8% Fibonacci Retracement level.
The decline led the RSI to reach the oversold level of 30. The Demarker too has moved further below the oversold level. There is a likelihood that the pair will resume the upward trend because the bank’s plan to cut rates was already expected.
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