Aussie dips after RBA hinted rate cut in November
The Australian dollar fell in late Asian session on Tuesday as the Reserve Bank of Australia left interest rate unchanged at record low, but hinted further easing to support the economy, devastated by coronavirus pandemic.
The central bank expressed strong concerns about high unemployment and continues to consider how further monetary easing could support the labor sector as economy opens up further.
The RBA’s decision to stay on hold comes after last month’s increase of funding facility to around A$200 billion with wide expectations for 15 basis points cut to 0.1% in November.
The Aussie rallied strongly last week, but bounce from new two-month low at 0.7005 faced strong headwinds and attempts to emerge above rising daily cloud failed, increasing risk of recovery stall.
Daily studies warn of fresh weakness as negative momentum is rising, stochastic reversed from overbought zone and is heading south, with additional pressure from 20/55DMA bear-cross as 20DMA repeatedly capped recent advance.
Fresh weakness eyes pivotal supports at 0.7131 (Fibo 38.2% of 0.7005/0.7209), 0.7117 (10DMA) and 0.7110 (daily cloud base) with break of the latter to generate reversal signal.
Res: 0.7193; 0.7208; 0.7228; 0.7257
Sup: 0.7154; 0.7131; 0.7110; 0.7083