Markets

AUD/USD slips below 0.7500 as the RBA pain continues

Australian dollar down more than 2%

It's always tough to pick which support lines will hold up after a game-changing central bank announcement.

Last week, when the BOJ didn't cut, there were bidders lurking around the April lows and the pair held it. But a day later it gave way and USD/JPY has been stuck in the mud since.

Today all eyes were on 0.7550 and 0.7500 in AUD/USD but both have broken now. The latest thrust hit 0.7490.

The one saving grace for AUD/USD is that Stevens didn't hint at another cut soon. The OIS market shows a 10% chance of a June cut and 26% chance of a July cut.

There is no reason for those probabilities to rise unless Australian economic data hits the skids.

However, it's never a good idea to fight the momentum when it comes after a big announcement. For now, the April low of 0.7490 is holding and that's followed by support at 0.7476.

The 55-dma at 0.7514 has broken but it will be important on a closing basis with spot currently at 0.7505.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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