• AUD/USD held steady around 0.6525 on Monday as markets braced for a RBA policy meeting this week where a rate cut is widely expected.
• The RBA is expected to cut rates by 25 bps to 3.6% on Tuesday after holding steady last month pending CPI data.
• Australia’s second-quarter CPI came in weaker than expected, reinforcing market expectations that the Reserve Bank will cut interest rates.
• Also in focus this week is Thursday’s jobs data, with forecasts pointing to a 25,000 rise in employment for July and the jobless rate holding at 4.3%.
•Swaps indicate that markets have fully priced in a quarter-point rate cut, while assigning only a minimal probability to a larger half-point reduction.
• Immediate resistance is located at 0.6542 (Aug 28th high), any close above will push the pair towards 0.6600(23.6%fib)
• Support is seen at 0.6515 (SMA 20) and break below could take the pair towards 0.6428(38.2%fib).
Recommendation: Good to sell around 0.6530 with stop loss of 0.6600 and target price of 0.6470
