AUD/USD: longer term, outlook is positive or negative?

Currently, AUD/USD is trading at 0.7827, down -0.01% on the day, having posted a daily high at 0.7837 and low at 0.7786.

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AUD/USD has rallied up to the descending resistance line from 0.7860 posted n the 28th Sep at the aforementioned 0.7837. The yield's in the US are supporting the higher betas such as the Aussie, given there were no green pastures to graze laid out for the bulls from the RBA statement overnight, and as widely expected, there wasn’t any hint of a change in bias.

"As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.50%," noted analysts at Westpac, adding, "on balance, however, it is reasonable to conclude that the statement is a little more optimistic than we saw last month."

Key notes from Westpac around the RBA:

• "The commentary around non-mining business investment strengthened. 
• The Bank, while noting recent strong employment growth, remains cautious about the unemployment rate, noting “the unemployment rate is expected to decline only gradually over the next couple of years”.
• As expected, despite the fall in the Australian dollar from around USD 0.80 to USD 0.782 since the last meeting, the commentary around the AUD is unchanged, “the higher exchange rate… is weighing on the outlook for output and employment”.
• It remains our view that the RBA and APRA (the regulator) will continue to target macroprudential policies at the household debt issue rather than use interest rates in the context of a fragile economy.
• As we have consistently argued, it appears that the Bank is expecting to raise rates sometime in 2018. With conditions in the housing market easing, and inflation and growth remaining sub-trend, there is no immediate urgency to move any sooner.
• We expect that as 2018 unfolds, the Bank will deem it necessary to revise down its growth assessments and continue to rely upon macroprudential policies to contain any further lift in the household debt to income ratio.
• We continue to expect that rates will remain on hold in 2018 and 2019."

AUD/USD levels

0.78 the figure guards good support at 0.7748/41 where the February and March highs are located. "Below 0.7740 there is scope for 0.7684, the previous 2016-2017 resistance line. Above .8162/66 lies the .8295 January 2015 high. The longer-term outlook is positive. The cross has broken higher from a large triangle formation that targets eventually .8715 (one year + target). This still remains viable while above .7685," argued the analysts at Commerzbank.