The Australian Dollar gains further bullish traction since the close of New York on Monday due to a combination of a weaker US Dollar Index and a rally in spot gold.
The minutes of the Reserve Bank’s May board meeting kept to the script of maintaining lower interest rates until inflation returns to the target band, an event it does not expect to occur until 2024 at the earliest, after the May 4 meeting the RBA left the cash rate at a historic low of 0.1 per cent.
“The board remained committed to doing what it reasonably could support the Australian economy and would maintain highly supportive monetary conditions until its goals for employment and inflation were achieved,” the minutes say.
Viewing the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has reinstated the positive signal as it climbed above the 50-midway point, while the Moving Average Convergence Divergence (MACD) holds a negative signal.
The Average Directional Movement Index (ADX) trend indicator is ranging, with no trend.
At present, the broader assessment is still contemplating a downward motion with the support region (bull camp) at US$0.7660-80. Reassess from there.
However, a decisive break above US$0.7800-05 would temporarily put a short squeeze in play to US$0.7870-75.