AUD/USD Analysis: RBA’s dovish stance to remain firmly in place
|AUD/USD Current Price: 0.6716
- Australian data mixed, still backing RBA’s loose monetary policy.
- US-China trade tensions to keep the Aussie under pressure.
- AUD/USD neutral-to-bearish, decline to accelerate once below 0.6675.
The AUD/USD pair heads into Tuesday’s opening trading a few pips above the 0.6700 figure, marginally lower daily basis although confined to the lower half of Friday’s range. Australian data released at the beginning of the day was mixed, as the August AIG Performance of Manufacturing Index came in at 53.1, in line with the previous estimate, although the Commonwealth Index declined to 50.9 from 51.3 in July. Also, the TD Securities Inflation estimate for the same month resulted at 0.0% from 0.3% in the previous month, while Company Gross Operating Profits rose by 4.5% in Q2 more than doubling the market’s forecast.
RBA’s monetary policy decision coming next
The Reserve Bank of Australia is having a monetary policy meeting this Tuesday, largely anticipated to keep the cash rate on hold at 1.0%. Furthermore, policymakers are expected to reiterate that they are open to cutting further if needed. The event could have a limited effect on the pair, as Australia will release its Q2 Gross Domestic Product next Wednesday. Ahead of the outcome of the meeting, Australia will release July Retail Sales, foreseen up by 0.2% following a 0.4% advance in June.
AUD/USD short-term technical outlook
The AUD/USD pair is bearish, according to technical readings in the 4 hours chart, as it has continued to meet sellers around a bearish 20 SMA, which develops a few pips above the current level, but also below the larger ones. Technical indicators remain well into negative ground, although given that the pair has been confined to tight intraday ranges in the last few days, they lack directional strength. A steeper decline would be likely once below 0.6675 a relevant static support.
Support levels: 0.6700 0.6675 0.6640
Resistance levels: 0.6750 0.6790 0.6820
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