The Australian Dollar rollercoaster ride took further bearish pressure on Thursday following an unscheduled rate cut from the Reserve Bank of Australia (RBA).
The emergency meeting held this afternoon witnessed the Reserve Bank of Australia (RBA) making history, after cutting its cash rate for the second time in a month.
As widely expected, the RBA cut its cash rate by a further 25 basis points after already doing so at its regular meeting at the beginning of March.
Thursday’s cut takes the cash rate to 0.25% and potentially, for now, is the RBA’s last cut for the meantime having recently flagged that it would not lower the cash rate below this threshold.
Since the US$0.5507 rebound from the near 18-year lows, the local currency surged to an intraday high of US$0.5963 overnight before its retreat and posted a spinning bottom candlestick at the New York close.
From the technical assessment, the spinning bottom candlestick is a formation that occurs when bulls and bears balance each other out, resulting in similar opening and closing price levels.
From the pattern, may signal that bears are losing control and bulls may soon take the reins.
However, there is still a lot of work to the upside to support any reversal to the bear trend.
Due to the high volatility, the key resistance is located at US$0.5950-65, with the immediate resistance located from US$0.5805 to US$0.5850-60.
The support is viewed from the near 18-year lows at US$0.5500-10 which is seen crucial as beneath here exposes the region of US$0.5375-85.