Audusd sees decline after RBA cuts cash rate to 3.85%

AUDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.57%	-36.8 Pips
Week to-date	0.36%	23 Pips
May	0.36%	23.1 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

In Australia, the Reserve Bank of Australia (RBA) has made the decision to lower the Cash Rate Target to 3.85%, down from the previous rate of 4.1%. This adjustment reflects the central bank’s monetary policy approach to addressing economic conditions. The decision to decrease the cash rate typically aims to stimulate economic growth by making borrowing cheaper, thereby encouraging spending and investment. However, such a move might also indicate underlying concerns about the economy’s current state or growth prospects, as central banks often lower rates to combat economic downturns or weak inflation.

In reaction to the RBA’s decision, the AUDUSD currency pair experienced a decline of 0.57%, bringing the exchange rate to 0.64199. This depreciation of the Australian Dollar against the US Dollar can be attributed to the market’s response to the reduction in interest rates, which often decreases the currency’s appeal to investors seeking higher returns on investments. The currency pair is currently observed to be in a phase of consolidation, indicating that there is a lack of strong directional movement, possibly as investors digest recent developments.

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What can we expect from AUDUSD today?

AUDUSD on Tuesday dropped -0.57% to 0.64199. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for AUDUSD looks mixed as the pair is likely to consolidate above 0.63877 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.64590 or trades above daily pivot 0.64234. Break above could target R1 at 0.64555. While to the downside, we are looking at 0.63877 (S1) and daily low of 0.63912 as support levels. AUDUSD need to break on either side to indicate a short-term bias. A close below 0.63912 would indicate selling pressure.

For the week to-date, take note that AUDUSD is mixed as compared to the prior week.

Key levels to watch out:

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