The RBA just surprised the markets with its 25 bps interest rate hike!
Will the event push AUD/USD above its Double Bottom pattern?
Check out what’s cookin’ on AUD/USD’s 4-hour chart:
AUD/USD: 4-hour
AUD/USD 4-hour Forex Chart
In case you missed it, the Reserve Bank of Australia (RBA) raised its interest rates by 25 basis points to 2.60% earlier today.
This is a tad lower than the 50 bps rate hike that markets had expected and priced in especially when the Fed just raised its rates by 75 bps.
Apparently, Governor Lowe and his team were (a) concerned about global growth and (b) wanted to wait and see how Australian households would react to the previous months’ multiple rate hikes.AUD/USD made new intraday lows at the report’s release but market bulls – who were also pricing in a risk-friendly trading environment – stepped in to boost AUD to new intraday highs.
AUD/USD is now trading just above the .6500 psychological handle that also marks the “neckline” of a Double Bottom pattern on the 4-hour time frame.
Can AUD/USD maintain its bullish momentum?
It will likely depend on risk appetite in the next trading sessions.
If traders continue to take risks and hate on the safe-haven dollar, then AUD/USD could bust above its Double Bottom neckline and retest previous inflection points like .6675 or .6850.
However, if the U.S. Treasury yields resume their upswing, or if this week’s economic data releases put the spotlight back on global growth concerns, then AUD/USD could dip back down to its September lows.
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