RBA Preview: AUD/USD to test the year high at 0.7063 on optimistic tone

The Reserve Bank of Australia (RBA) will announce its latest decision on monetary policy, which is expected to stay on hold, this Tuesday at 04:30 GMT. The AUD/USD pair is nearing the 0.7000 level ahead of the event, trading at its highest in almost a month, and could test the 0.7063 year high on a positive statement, FXStreet’s analyst Valeria Bednarik briefs.

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Key quotes

“The Australian cash rate stands at a record low of 0.25% and is expected to remain at the mentioned low for a long time. Adding to record low rates, the RBA has opened the door to bond-buying, although it only purchased government debt on one occasion, and it doesn’t seem it would need to rush into it anytime soon.”

“AUD/USD could find support in optimistic policymakers, in which case the pair could retest the year high at 0.7063. Beyond this last, the next possible bullish target is the 0.7100 figure.”

“A surprise dovish stance could see the aussie retreating towards the 0.6940 price zone, while below this last, the next relevant support comes at 0.6895.”