The Reserve Bank of Australia (RBA) surprisingly decided to  maintain its policy rate at 3.75% today and market was caught on the wrong foot as 20 out of 22 economist were sure of a 25 bps rate hike.

Post-RBA decision AUD was slaughtered on the back of stop-loss and exit orders of long positions against USD, EUR, CAD and JPY. Overnight strength in global equity markets with Oil rallying around 4% brought a retrace to currency universe and with risk appetite bouncing, AUD trading almost 1 big figure better against those currencies above.

I was on the sell side above 0.9200-50 in AUDUSD thinking about any possibility of a rate hike in China or US may put pressure on IR differentials and limit the appreciation of mighty Aussie beyond 0.9350 against USD.  China helped on that argument and now more pressure on IR differentials as RBA may come to the end of its tightening cycle while market is still long of AUDs.

I think market is going to hold it firmly at 0.9020 and AUDUSD will put pressure on 0.8575-0.8565 support( 0.8565 is 200 days SMAVG vs. weekly bearish trend channel bottom at 0.8575) and may try to extend the drop down to 0.8215 which is the 38.2% Fibonacci retrace of 0.6287 to 0.9406 on weekly.

While above is a more wider parameter based trading idea, for those short term punters, sell AUDUSD at 0.8875 and 0.8915 with a SL at 0.8945, target 0.8710 and 0.8565 accordingly.