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AUD/USD capped by $0.9300

Kira Iukhtenko, analyst

AUD/USD has edged lower on Tuesday. The pair touched a high of $0.9302 late in the Asian session but was unable to hold these gains and returned into the mid-$0.9200 range. 

As expected, the RBA maintained the benchmark interest rate at 2.50%, where it holds since last August. The RBA Governor Stevens pushed the Aussie to a 4-month high above $0.9300, saying the interest rates are seen stable in the observable future. However, the RBA still blames the overvalued currency for hurting economic growth. 

Weak China manufacturing PMI from HSBC confirmed the market woes on the Chinese economic slowdown and contained the upside in AUD/USD. As for the US news flow, the March ISM manufacturing PMI came at 53.7 (below the forecast, but up from 53.2 in February). 

We may see that the economic background doesn’t create any significant reasons for a break above $0.9300 in the near term. Next strong support for the pair lies at $0.9230 and $0.9120. The outlook remains bullish with a medium-term target of $0.9500 as long as the $0.9080 key support holds. 

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