At a Monetary Policy meeting of the Governing Council of the Reserve Bank of Australia from earlier today, it was expectedly decided that RBA's Cash Rate will remain unchanged at 0.10 per cent in December.
The Council also decided to refrain from adjusting its current Asset Purchase Facility owing to the fact that the Australian economy has experienced an overall better-than-expected recovery pace. Even still, the likely impact of the mixed developments recently was analysed in length by the Council:
"On the one hand, infection rates have risen sharply in Europe, and the United States and the recoveries in these economies have lost momentum. On the other hand, there has been positive news on the vaccine front, which should support the recovery of the global economy. The recovery is also dependent on ongoing support from both fiscal and monetary policy. "
Overall, the Committee acknowledged that the road to global recovery could be jeopardised by the uptick of confirmed cases, particularly in Europe and North America, but on the flipside, the situation in Australia is easing.
The RBA eyes the possibility for a protracted and uneven recovery until the end of 2021 when, according to the Council, Australia's Gross Domestic Product would reach pre-pandemic growth levels.
Meanwhile, the Australian dollar appears to be losing some of its bullish momentum against the greenback, at least momentarily, as the AUDUSD continues to be consolidating below the Resistance Area (as seen on the daily chart below) for the sixth consecutive day.
RBA's decision to refrain from implementing any major changes to its monetary policy at the present rate did not support AUDUSD's bullish rally. Instead, the pair appears to be headed towards the major resistance (currently serving as support) level at 0.73200.
After the throwback is concluded, the price action would test the strength of the newly formed support, and the market could develop in one of two ways.
On the one hand, the price could rebound from the support due to the reeling dollar, and subsequently, attempt another breakout above the resistance area. On the other, the support level at 0.73200 could fail, in which case the price could try to continue driving the dropdown towards the next support at 0.72000.