AUD/USD dips below 0.74 handle as RBA warns on house price

The AUD/USD pair dipped below 0.74 handle after the Reserve Bank of Australia (RBA) warned about housing market risks and the potential negative impact on consumption and inflation.

The statement of monetary policy released today says the sentiment in the housing market could turn quickly if the prices fall, leading to slower consumption and inflation.

Focus on Wage growth

The RBA feels a sustained rise in inflation is possible with the strong wage growth. This is pretty much in line with what the Fed, the BOE and other major central banks have been saying.

The inflation and GDP forecasts have been kept unchanged. Overall, the statement tilts slightly to the negative side given the warning regarding the housing market.

AUD/USD Technical Levels

The pair was last seen trading at the session low of 0.7396. A break below 0.7383 (previous day’s low) would expose support at 0.7364 (Nov 24 low) and 0.7311 (Nov 21 low). On the higher side, resistance is seen at 0.7440 (Apr 27 low) and 0.7457 (5-DMA), 0.7481 (10-DMA).