AUD/USD trims gains as RBA SoMP downgrades growth forecast

AUD/USD has shed10 pips on RBA's downward revision of GDP forecasts.
The SoMP talked dovish on wage growth but is reluctant to ease further in the near-term.
AUD may revisit highs on trade optimism and if China trade data betters estimates.

Omkar Godbole FXStreet Contributor

AUD/USD has backed off from the session high of 0.6906 to 0.6895 in response to the downward revision of the Aussie growth forecast by the Reserve Bank of Australia (RBA).

The Statement of Monetary Policy (SoMP) revised lower the gross domestic product (GDP) forecast for December quarter to 2.25% from 2.50%.

Further, it said the board members stand ready to ease further if needed. The central bank has cut rates three times this year to a record low of 0.75%.

The Aussie economy is 'gradually coming out of a soft patch', wage growth is low and no longer expected to pick up, the SoMP added.

The comments on wage growth are dovish. Even so, the AUD is avoiding big losses, possibly because the RBA is not comfortable easing policy further in the near term due to concerns that it will be interpreted by markets as an overtly negative view on the economy.

That leaves the doors open for the AUD/USD pair to revisit highs above 0.69 on the US-China trade optimism. A White House spokesman told Fox News a few minutes before press time that the White House is very optimistic that a trade deal with China would be reached soon.

China trade data due later Friday could influence the demand for the Aussie Dollar, a proxy for China.

Technical levels

AUD/USD

Overview
Today last price	0.6895
Today Daily Change	0.0001
Today Daily Change %	0.01
Today daily open	0.69

Trends
Daily SMA20	0.6847
Daily SMA50	0.681
Daily SMA100	0.685
Daily SMA200	0.6949

Levels
Previous Daily High	0.6914
Previous Daily Low	0.6861
Previous Weekly High	0.693
Previous Weekly Low	0.681
Previous Monthly High	0.693
Previous Monthly Low	0.667
Daily Fibonacci 38.2%	0.6894
Daily Fibonacci 61.8%	0.6881
Daily Pivot Point S1	0.6869
Daily Pivot Point S2	0.6839
Daily Pivot Point S3	0.6816
Daily Pivot Point R1	0.6922
Daily Pivot Point R2	0.6945
Daily Pivot Point R3	0.6975

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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