The AUDUSD fell nearly 70 pips from its daily high of 0.8042, following the RBA's rate decision. The rate statement contained some positives as well as some negatives. The RBA noted that the continued rise of the Australian dollar may create an obstacle to growth and may delay inflation to reach the target, and added that the current labor market conditions are positive.
Perhaps the most important advantage of the rate statement today is that the global market conditions continue to improve, the labor market continues to show improvement, and economic growth in China, Australia's largest trading partner, is also recovering. The bank expects employment growth to continue after showing its recent strength, as well as for inflation to recover.
As for the negatives presented by the statement, the most prominent of which were the uncertainty about the expectations of consumption, the slowdown in real wage growth and the rise in household debt. RBA stressed that the economic activity will slow if the Australian dollar continues to appreciate, and this is one of the main reasons for the decline of the Australian dollar today, Markets are now ready to shift central bank policies toward tightening monetary policy.
Technically on the 4-hour chart, we can see that after the AUDUSD dropped since the beginning of trading day, it reached a strong support area at 0.7956, and we expect it to rise again if it keeps trading within the ascending channel targeting the highest level the highest level for more than two years at 0.8064, exceeding this level prices are expected to move towards the next resistance level at 0.8166. If the pair managed to break the ascending channel and move below the EMA 50 it would move towards the next support level at 0.7873 and then again to the strong support at 0.7755.
On the long term on weekly chart, we see that the pair is testing the 200-week EMA and if it succeeds in closing above it prices would reach the resistance level at 0.8166, and above that we might see it reaching the next resistance at 0.8656, which is the target of ascending triangle.