The Australian dollar gained strength over the green back after the Reserve Bank of Australia left its cash rate at a record low 2.5% as widely expected in its latest board review on Tuesday.
Governor Glenn Stevens emphasized continued accommodative policy while warning that the exchange rate remains high by historical standards.
“The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months. The exchange rate remains high by historical standards,” Stevens said.
“Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2%–3% target over the next two years.
Intraday bias remains on the upside as a fresh cross of 21 and 55 EMA is seen on the 1hour charts with MACD and RSI oscillators also showing a sign of bullish continuation. However stochastic is showing a minor retracement could be seen in the pair after the pair found resistance at 0.93659. A break of 0.93659 could trigger more demand to 0.94392.
An important economic indicator to watch out for is the AUD Retail sales scheduled to be released at the early hours of the today’s trading session.