On Tuesday, the value of the Australian dollar surged after the Reserve Bank of Australia (RBA) surprised financial markets by hiking interest rates once again while also indicating that more rate hikes would be required in the future.
This comes as a surprise since the RBA had decided to let the interest rates remain unchanged in the last meeting while also indicating that it had no plans for any rate hikes in the near-term future. Analysts were under the assumption that the RBA would continue with the same plans.
The release of the Consumer Price Index last week was positive for the AUD as the numbers came back better than predicted. Despite this, we saw a drop in the numbers from last week. This was another indicator that the RBA would likely hold off on any potential rate hikes. Despite this, the central bank of the nation had other plans for its currency.
The AUD/USD pair started off the day relatively stable with no major price movements. However, after the release of the decision by the RBA to increase interest rates, the market faced extreme volatility and jumped from 0.6626 to 0.6691 within minutes.
While this isn’t the highest price that the AUD has seen this week, it certainly is the fastest that the currency has jumped in quite some time. The AUD/USD pair has been treading the waters with relatively stable conditions ever since.
Key support levels to look out for with the AUD/USD are 0.66626 and then further down to 0.66437. Moreover, key resistance levels are 0.66821 and further up to 0.66899.
The AUD/JPY pair is also one of the many AUD markets that started off the day with relatively stable conditions. However. The release of the RBA meeting result caused this currency pair to face volatile market conditions and jump from 91.175 to 92.149 within minutes.
The price jump helped AUD/JPY reach its three-month high. However, this volatility and price hike were short-lived as the pair later dropped to 90.905. As a result, the currency pair is back at its pre-RBA price movements.
Key support levels to look out for with the AUD/JPY are 90.641 and then further down to 90.450. Moreover, key resistance levels are 91.666 and further up to 92.154.