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RBA Leaves the Official Cash Rate at 2.50%

The Reserve Bank of Australia concluded its monetary policy meeting at the start of the 7/1 Asian session and held its official cash rate at 2.50%.


The official RBA statement was very similar to recent ones, noting a fragile recovery. There is no need for further tightening, but the bank does not seem to be offering any rate hike outlook at this point. RBA's economic outlook remains very conservative, but traders are buying up the Aussie after the RBA statement. 

AUD/NZD for example is working off a double bottom and the rally after the RBA statement is helping confirm the case for at least some short-term bullish correction. The 1.0825 level could be short-term resistance.

(audnzd 4h chart, 7/1)

After the RBA statement, the AUD/USD is breaking above June's highs pitting the current rally against the 2014-high at 0.9461. While AUD/NZD is shaping out for a bullish correction, the AUD/USD is shaping up for a bullish continuation.