RBA Preview: Dovish stance seems quite unlikely while AUD/USD gains bearish strength

The Reserve Bank of Australia is having a monetary policy meeting and will announce the outcome early on Tuesday. The RBA is widely expected to maintain its monetary policy on hold while the economic outlook could be upwardly revised, but quantitative easing is here to stay. AUD/USD is at risk of falling further, FXStreet’s Chief Analyst Valeria Bednarik briefs.

See – Reserve Bank of Australia Preview: Forecast from six major banks

Key quotes

“The central bank is widely anticipated to maintain rates unchanged at a record low of 0.1%, with the market focusing on any possible twist to the economic outlook and/or future policies. Chances of changes there are also quite a few.”

“Australian policymakers have for long said that the pandemic impact on the economy has been softer than initially anticipated, but this time, they could move one step forward, and provide markets with a more upbeat outlook, given Australia’s privileged situation. Worth noting that is not the time to talk about unwinding facilities. Instead, policymakers may reiterate that they remain opened to add stimulus if necessary, should the situation worsen.”

“The RBA has little chances of hurting the aussie, yet the pair could accelerate its slump on a break below 0.7591, January’s monthly low. Next supports are located at 0.7550 and 0.7520.”

“The AUD/USD pair could resume its advance on a recovery above 0.7700, but bulls won’t regain control unless it surpasses the 0.7770 resistance area.”