The Australian Dollar was given a boost today following current account data, just hours before today's RBA cash rate decision.
AUD has appreciated against all majors this morning and risks remain skewed to the upside if RBA sit tight. AUD/USD broke above Friday’s NFP high and now looks comfortable above 76c. The intraday trend remains firmly bullish, as long as we remain above the 0.7575 swing low.
That said, with the consensus being no change, then only a minor adjustment from RBA in their statement could weigh on the Dollar to take the wind out of its sail.
Traders seem to be pricing in a dull RBA meeting on AUD/NZD today – we don’t expect any notable changes to their statement either, so AUD/NZD is likely to remain supported throughout the session. If no action is taken then this should see a stronger AUD, initially at least.
AUD/NZD has overcome an important technical barrier and now sits at a 4-day high. The bearish trendline from the August high of 1.075 has been broken and a bullish pattern (inverted head and shoulders) has been confirmed with a break above 1.40. If successful, the pattern assumes a run towards the 1.0468 high.
If RBA ‘ease off’ of any easing bias, then AUD/NZD could trade to 1.045 this session.