AUD/USD hit new session low after RBA kept rates unchanged, cautioned on labor market

• The Aussie dollar has come under pressure after the Reserve Bank of Australia (RBA) maintained status quo as expected, but sounded cautious on labor market
• The AUD/USD pair if flirting with a key rising trendline support.

The Reserve Bank of Australia kept interest rates unchanged at a record low of 1.5 percent as expected, but said the labor market has slowed over the recent months.

Key points

• Board judged holding rates consistent with sustainable growth, achieving the inflation target
• Low level of interest rates continuing to support the Australian economy
• Expects economic growth to pick up to average above 3 pct in 2018, 2019
• Household consumption remains a source of uncertainty
• Inflation likely to remain low for some time
• Employment growth has slowed over recent months
• An appreciating exchange rate would be expected to result in slower pick-up in the economy, inflation than currently forecast
• Australia's terms of trade expected to decline over next few years, but remain at high levels
• Housing markets in Sydney, Melbourne have slowed
• Wages growth expected to remain low for a while yet
• There are concerns about the direction of international trade policy in the united states
• Forward-looking indicators point to solid jobs growth, with gradual reduction is jobless rate expected

The AUD/USD fell to a session low of 0.7627, possibly due to RBA's cautious comments on the labor market, wage growth, and household debt.

As of writing, the currency pair is trading below the support of the trendline sloping downwards from the Jan. 26 high and Apr. 19. A close below the trendline would invalidate the immediate bullish outlook.

AUD/USD Technical Levels

Key resistance: 0.7683 (200-week MA), 0.7712 (February low), and 0.7768 (50-week MA).

Key support: 0.7600 (10-week MA), 0.7554 (weekly, low), and 0.75 (December low).