• AUD/USD edged higher on Wednesday as Australian dollar remained bid following the Reserve Bank of Australia’s rate hike.
• The Reserve Bank of Australia raised its benchmark cash rate by 25 basis points to 4.10% on Wednesday, marking the highest level in 10 months. This move effectively reverses two of the three rate cuts implemented last year, signaling a clear shift back toward tightening.
• RBA Governor Michele Bullock indicated that the board unanimously agreed further tightening was necessary, though there was some debate about the timing of additional rate hikes.
• Markets imply a 50-50 chance the Reserve Bank of Australia will hike again at its next meeting in May, and rates of 4.35% are fully priced by August.
• Australia’s February employment data is due Thursday, with the Reuters consensus pointing to an unemployment rate of 4.1%. Labour market resilience could further support expectations of additional RBA tightening.
• Immediate resistance is located at 0.7156(Higher BB), any close above will push the pair towards 0.7195 (23.6%fib).
• Support is seen at 0.7067 (38.2%fib) and break below could take the pair towards 0.6994(Lower BB)
Recommendation: Good to buy around 0.7100 with stop loss of 0.7100, and target price of 0.7020
