- The Aussie holds election result driven gains ahead of RBA minutes and Governor Lowe’s speech.
- The US-China spat can keep entertaining traders amid lack of major data/events.
Having recovered on the election results during Monday, the AUD/USD pair holds the strength to trade near 0.6910 at the initial Asian session on Tuesday. The minute’s statement of the latest Reserve Bank of Australia (RBA) meeting is in the spotlight for now.
Not only surprise victory of the present PM Scott Morrison but tax cut announcement just after few hours of his selection also pleased the Aussie buyers recently.
On a trade front, the US and China continue to jostle for better terms by turning down each other. The US earlier banned China’s Huawei from doing business with their firms but the US
Commerce Department recently came out with the temporary 90-day license to offer a bit of relief.
Risk tone was a bit light off-late as the US 10-year treasury yields grew more than 2 basis points to 2.42% by the press time.
While the quarterly rate statement has already dimmed importance of today’s minute statement from the RBA, investors might seek further details on why the Australian central bank refrain from rate cuts and hiked economic forecasts instead.
Additionally, the RBA Governor Stephen Lowe is also up for speaking at the Economic Society of Australia Business Lunch, in Brisbane. His comments will also be observed to validate a minute statement.
Given the absence of major catalysts after RBA, markets are likely to emphasize more on the news reports concerning the US-China story in order to determine near-term trade sentiment.
Technical Analysis
A downward sloping trend-line since April 18 can limit the quote’s immediate upside at 0.6940 whereas 0.7000, 0.7030 and 0.7055 may entertain buyers afterward.
Alternatively, 0.6880 and 0.6860 seem nearby supports to follow during the pair’s pullback a break of which can recall January 2016 low surrounding 0.6830 on the chart.
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