Failing to maintain the strengthening momentum, the Australian dollar plunged at the end of the Asian session shortly after the publication of the results of the Australian central bank meeting which met expectations to raise interest rates.
The Reserve Bank of Australia (RBA) raised interest rates by 50 basis points to 1.85% as expected, but the dovish tone statement by governor Philip Lowe was a factor that invited a significant decline in the Aussie dollar continued in European session trading.
According to Loew, the central bank is also committed to further tightening but it fails to stay on the "set path", as the size and timing of interest rates will be driven by published data.
Therefore, the RBA is seen as likely to slow down interest rate hikes at its next policy meeting while reflecting investors' negative reaction to the Aussie dollar trading down from a 1-month high reached earlier in the week.
Looking at the price movement for the AUD/USD currency pair, the price managed to record a new 7-week high on Monday yesterday, reaching a level around 0.70450 but failed to maintain the rising pattern after the RBA meeting.
Today's plunging price has crossed the 0.7000 level and also the Moving Average 50 (MA50) support level on the 1-hour time frame on the AUD/USD chart to signal a bearish trend change again.
Trading in the European session as of 6 pm, the price has plunged more than 100 pips to a level around 0.69200 with the expectation that the price decline will continue in the next session.
A continued decline is seen to test the important zone at 0.69000 which was seen as a price support level during last week's trade.
Next, the price that managed to penetrate the zone is seen to shrink to the RBS (resistance become support) zone at 0.68300 to record the latest 2-week low.
On the other hand, if the price fails to break through the 0.69000 barrier level and starts showing an increase again, the 0.70000 level is seen to be the resistance that will be tested before the continued increase will reach the high level again at the beginning of the week.
For a higher bullish target, the price is expected to continue its surge up to the 0.71000 zone to record a recent 8-week high.
