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The markets expect the Reserve Bank of Australia (RBA) to keep rates on hold at 0.25% for the next three years, as indicated by the RBA Governor himself in an earlier statement. Therefore, the emphasis on tomorrow's event is the RBA statement. The RBA has traditionally held a 4.5% unemployment rate target and an inflation target of 2-3%. The RBA statement may focus on its forecasts for GDP and unemployment. Previous forecasts by the RBA are a 10% GDP contraction in the first half of 2020, with GDP expected to fall 6% for the full year. Growth is forecast to turn positive in 2021, averaging 6-7%. Unemployment prediction is set at 10% in June 2020, with negative annualized inflation for the June quarter 2020. Markets would want to know if these forecasts will be maintained, or if they will be revised upwards or downwards. The RBA Governor may discuss the state of the bank's balance sheets and use this to reference economic forecasts for the country. Central banks are swelling their balance sheets as they purchase bonds and other assets as part of their quantitative easing programs. These balance sheets are not a problem in crises but could create asset bubbles during unwinding as market conditions normalize. An additional $310 billion in bonds could be added to the RBA's balance sheets over the next three years, as it holds rates steady. In contrast, the US Federal Reserve's balance sheet may swell by up to $4trillion and $9trillion. The Fed's balance sheet at the end of its QE program following the 2008 global financial crisis stood at $4trillion. It was unable to unwind this to a high degree before the coronavirus pandemic hit. The balance sheet to GDP ratios for the RBA could peak at 15% of GDP, while that of the Fed could balloon to 45% of GDP. Of the two central banks, the RBA is in a better position to unwind its balance sheets after the coronavirus pandemic. Traders will look towards the statement to see a reiteration of the RBA's balance sheet position. This will play a significant role in the medium-term to long-term outlook for the AUDUSD pair. Download our Q2 Market Global Market Outlook Technical Playbook for AUDUSD The weekly chart for the AUDUSD shows the pair's recovery move has stalled at the 61.8% Fibonacci retracement from the swing high of 30 December 2019 to 16 March 2020. This tallies with the 0.64498 price level. A break above this price level is required to take the AUDUSD towards the key 0.68632 price area (88.6% Fibo retracement). This move has to traverse the 0.66742 resistance as well as the 0.67090 resistance level (78.6% Fibo retracement). Only a breach of the 0.68632 price level, as well as the 0.70391 resistance, will initiate a medium-term bullish reversal that could target the 127.2% and 141.4% Fibo extension price levels at 0.74587 and 0.76777. On the flip side, last week's pinbar could be ominous for the pair. Resumption of the downtrend could be triggered if the price candle for this week is unable to breach 0.64498. This opens the door for the pair to aim for downside targets at 0.62678 (50% retracement), 0.61748 (23/24 March highs) and 0.60105. Further downside targets remain at 0.58606 and 0.56577. Tomorrow's RBA statement is a medium-term play which would go beyond any post-news price reaction on the pair.