AUD/USD
The RBA kept rates on hold yesterday; but left the door open for a future rate cut, saying: "The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand." As historically, the RBA has never cut interest rates past 3.00% before, and interest rates are currently at 3.00%, I wonder if they are even considering a rate cut. I think the more plausible likelihood is that they've watched in complete shock as Japanese government officials have effectively depreciated their currency simply by jawboning. Could it be that the RBA is finally realizing that communication tools are an effective path to lower what they have long deemed a "high exchange rate?"
The rate statement, combined with retail sales: Actual: -0.2%, Est: 0.3%, Previous -0.1% (revised to -0.2%) has pushed the AUD/USD to test the recent swing low at 1.0360 where it currently trades. If this currently downward momentum breaks the swing low from December at 1.0345 then a lower low has been put into place, which is a significant bearish signal. The first real range of support below current levels is the 200 SMA converging with a 0.618 fib retracement at 1.0315 with the big figure below it. A close on the daily chart below a previous spike low at 1.0287 should open the door for a further move to the downside.
AUD/USD Range of Support: 1.0315 - 1.0290
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