Buy Australian Dollar Dips: OCBC

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OCBC says it favours buying dips in the Australian Dollar.

Strategists at OCBC look for further Aussie Dollar upside and hold a dip-buying stance on the currency.

The call from South-east Asia's second-largest bank follows the Reserve Bank of Australia's interest rate cut, delivered Tuesday.

The AUD dipped and registered a floor at $0.6481, from where buying interest emerged; it then extended gains following a benign USD CPI inflation report.

AUD/USD has subsequently reclaimed 0.65, seen as a key level by traders.

OCBC says RBA Governor Michelle Bullock's press conference did not indicate any major shift in policy bias.

This interpretation runs counter to the view that the RBA has undergone a 'dovish' shift and may favour more cuts in the future, a belief that delivered broad-based AUD weakness in the wake of the policy decision.

However, OCBC says Bullock confirmed further moves on interest rates are possible if data warrants, while also saying that a larger cut was not discussed at the meeting.

"From a FX point of view, RBA is cutting rate from a position of stability not distress," says Frances Cheung, FX and Rates Strategist at OCBC, South-east Asia's second-largest bank.

"Bias remains to buy dips," adds Cheung.

From a technical perspective, Cheung notes bearish momentum on daily chart faded while RSI rose. Resistance is now seen at 0.6550, 0.66 levels, and support at 0.65 and 0.6430.