The RBA is back in action this month and things are certainly getting quite interesting for Australia's central bank. We've gone from thinking about rate cuts to rate hikes now. So, the question is will the RBA acknowledge those developments? And if so, what sort of tone will they want to deliver today? You can check out the previews put up by Eamonn earlier here.
As for AUD/USD, the technicals are saying quite a lot in light of recent developments. The pair is eyeing a fifth straight day of gains as it runs up against the technical resistance region around 0.6634-50 currently. The 38.2 Fib retracement level of the swing higher last year also comes in at 0.6641.
The rebound since late April was largely fueled by the narrowing in the divergence between the RBA and Fed outlooks. And that is not to mention the better performance in risk trades as of late with US data stuttering.
Essentially, the pair is now eyeing a topside break to secure the next leg higher beyond 0.6634-50. Buyers will be looking to the RBA to provide them with the ammunition to do so. As such, the onus is on the RBA in this make or break moment for further AUD/USD upside.
Should there be a break higher, there will be little stopping the pair from touching 0.6700 at least next. Thereafter, the December high of 0.6871 will be the next crucial technical top to watch out for.
