AUD/USD charts 90-pip bounce as RBA cuts rates as expected

AUD/USD jumps 90 pips as RBA met dovish expectations.
The central bank cut rates by 25 basis points and announced a bond purchase program.
Australia's 10-year yield surged after the rate cut decision.

Omkar Godbole FXStreet Contributor

AUD/USD pair added 90 pips and recovered to 0.5633 after the Reserve Bank of Australia cut rates by 25 basis points to a new record low of 0.25%, as expected.

The central bank also announced a government bond purchase program, which is will commence from Friday. The bank will be buying bonds in the secondary market.

With coronavirus pandemic threatening to push both the global and Australian economy into recession, the RBA was widely expected to hit the zero lower bound and start a bond purchase program to pump liquidity into the system.

The dovish move was priced in advance, as evidence from AUD/USD's slide from the high of 0.6685 seen on March 3 to lows near 0.545 seen ahead of the central bank's decision.

As a result, the Aussie dollar has bounced, possibly on "buy the fact" trade and could continue to gain altitude during the day ahead, more so, as Australia's 10-year government bond yield surged by over 100 basis points in the last few minutes. At press time, the pair is trading near 0.5580, still down over 3% on the day.

Technical levels

AUD/USD

Overview
Today last price	0.555
Today Daily Change	-0.0224
Today Daily Change %	-3.88
Today daily open	0.5774

Trends
Daily SMA20	0.645
Daily SMA50	0.6648
Daily SMA100	0.6758
Daily SMA200	0.6804

Levels
Previous Daily High	0.6029
Previous Daily Low	0.5701
Previous Weekly High	0.6686
Previous Weekly Low	0.6122
Previous Monthly High	0.6775
Previous Monthly Low	0.6434
Daily Fibonacci 38.2%	0.5826
Daily Fibonacci 61.8%	0.5904
Daily Pivot Point S1	0.564
Daily Pivot Point S2	0.5507
Daily Pivot Point S3	0.5313
Daily Pivot Point R1	0.5968
Daily Pivot Point R2	0.6162
Daily Pivot Point R3	0.6296

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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