AUD has held up relatively well considering the pressure on risk currencies in general. The fact that speculative positioning in AUD has already fallen to extreme levels suggests 1) scope for further downside is limited and 2) AUD could bounce strongly in the event of good news.
In the event, the RBA unsurprisingly left policy rates unchanged but focussed attention on the recent rise in inflation. The RBA highlighted in its accompanying statement that inflation has been higher than forecast. Moreover, the RBA does not appear to be actively talking the AUD down but highlighting the benefits of past AUD weakness if sustained.
Overall, the statement is bullish for the AUD especially as it appears to confirm that the policy easing cycle is over. Consequently the bounce in AUD following the rate decision is likely to be strong.
AUD/USD technical support is seen around 0.8660, with resistance at 0.8889.
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