AUD/USD downside pressure still remains for the time being
Buyers have managed to push price back above 0.6700 and just above the 100-hour MA (red line) currently, but there seems to be little conviction to go chasing an upside extension or for further short covering after the RBA decision earlier.
The RBA kept rates unchanged but continued to maintain a similar message - more or less - and that is leaving the market to now price in a move for either April or May. Odds for a move in April are seen at ~67% currently.
I wouldn't expect the aussie to post significant gains after the RBA today so any further upside move may have to depend on risk and coronavirus developments instead.
That said, there is still notable resistance around 0.6754-56 and that may prove to limit any further upside movement in the pair in the near-term.
In the bigger picture:
Nothing much has really changed for the aussie and I still view the path of least resistance is still for a move lower, although with the market already having largely priced in a move by April or May I reckon the downside scope may be a little lesser.
But unless the domestic economy starts to show some signs of improvement - especially on inflation - then it is only a matter of time before we start talking about potentially more than one rate cut by the RBA this year.
That could be what triggers further downside in AUD/USD with key support around 0.6675-90 still very much in the picture at the moment.
