• AUD/USD firmed on Monday as traders awaited the Reserve Bank of Australia’s policy decision due on Tuesday.
• The RBA is likely to keep rates at 3.6% on Tuesday, but markets will scrutinize any signals on future policy following hotter inflation data that sparked bets on a pause in easing.
• Following several rate cuts, economic growth accelerated in the second quarter while unemployment remained steady, indicating the RBA may slow its pace of easing.
• This year’s rate cuts came in February, May, and August, timed after the release of inflation data
• At GMT 05:20, the Australian dollar was up 0.39% to 0.6570 against the US dollar.
• Immediate resistance is located at 0.6595(SMA 20), any close above will push the pair towards 0.6607(38.2%fib)
• Support is seen at 0.6518(38.2%fib) and break below could take the pair towards 0.6500(Psychological level).
Recommendation: Good to buy around 0.6560 with stop loss of 0.6490 and target price of 0.6620
