The RBA extended its quantitative easing program by an additional $76.2 billion at its February meeting. The RBA, like many central banks around the world, said that the economic recovery remains dependent on the progress of the coronavirus pandemic, and further fiscal and monetary support will be needed before the goals of inflation and unemployment are achieved.
The bank reiterated the same statement as before, that it does not expect to meet its inflation goal until 2024 at the earliest and that the board supports maintaining cash values until actual inflation is sustained in the 2% to 3% range.
The JPY225 closed 1.3% higher, after trimming some gains following an FT story that China is considering limiting rare earth mineral supplies to US defence contractors, which re-kindled concern over the future of US-China relations. The index held above the 30000 mark, however. The Hang Seng rallied 1.7% after coming back from the extended weekend and the AUS200 moved up 0.7%. China remains closed for the Lunar New Year holiday.
Meanwhile, AUDUSD rose 0.30%. AUDUSD’s rise from 0.7563 continues today and intraday bias remains on the upside to try to break resistance 0.7819. Further strengthening after breaking out of the resistance will target the price 0.8135, the peak formed in January 2018. On the downside, the 0.7717 minor support will be the obstacle to extending the correction from 0.7819. In case of a breakdown of these levels, correction bias will target lower levels below 0.7650 and 0.7582. Technically, it can be read from the ADX for the daily or 4 hour period that the momentum of the uptrend has not been completed and the price is still moving above the 20-day EMA 20 (green line).
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Ady Phangestu
Market Analyst
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