# AUD/USD: RBA Interest Rate Cut Setup (May 7, 2013)

Source: https://www.tradersway.com/resources/market-info/aud-usd-rba-interest-rate-cut-setup-may-7-2013/
Language: en
Updated: 2013-05-07

The RBA just cut interest rates by 25 basis points from 3.00% to 2.75% earlier in today’s Asian session. This pushed AUD/USD below the support level around 1.0230 to a low of 1.0178 right after the statement.



In past rate decisions where the RBA cut interest rates, the pair usually makes a strong break to the downside then makes a small retracement prior to the European session. The pair could still pull up to the 38.2% Fibonacci retracement level before heading any lower in the later trading sessions.



![AUD/USD: RBA Interest Rate Cut Setup (May 7, 2013)]



A good entry point could be the 1.0230 mark, which is in line with the 38.2% Fib and the former support level. Stochastic is already heading lower on the 15-minute chart though, which suggests a further move down. After all, European and American traders have yet to react to the surprise rate cut earlier today.



A stop above the highest Fib level or at 1.0300 with a target of 100 pips or more would yield a good reward-to-risk ratio for a day trade.



*By Kate Curtis from Trader’s Way*