The AUDUSD pair declined slightly as the market reacted to the decision by the Australian central bank. It is trading at 0.7180, which is lower than the intraday high of 0.7210.
In its October decision, the bank decided to leave the main interest rate unchanged at 0.25%. That was in line with what analysts polled by Reuters were expecting. It was also the eighth straight month that the bank has not tweaked rates.
The bank also decided to continue with its yield-curve control program. This is where it places a target for the three-year Australian government bonds and buys as much as possible to ensure that they remain in that target. In addition, the bank left its other financing tools unchanged.
The decision comes at a time when the Australian economy is on a recovery path. After sliding by 7% in the second quarter, analysts believe that the economy eked a gain in the third quarter. However, the second-wave of infections in the country has affected the recovery.
The AUDUSD also reacted to Australia’s trade numbers. Data from the bureau of statistics showed that the country’s exports declined by 4% in August while imports rose by 2%. These dynamics led to the trade surplus easing from more than $4.6 billion in July to $2.6 billion in August.
AUDUSD technical outlook
The AUDUSD is trading at 0.7180. On the hourly chart, the price is below the today’s high of 0.7210, which was also the highest level on October 1. The price has also moved below the ascending green trendline that connects the lowest levels in September 25, October 2 and 5.
Also, it has moved below the 50% Fibonacci retracement level. This retracement joins the highest and lowest levels in September.
Therefore, by breaking the ascending support, it means that the pair will likely continue falling as bears aim for the 38.2% retracement at 0.7135. On the flip side, a move above the day’s high will invalidate this trend.