RBA’s pessimism and soft housing market data couldn’t disappoint Aussie buyers as risk sentiment remains strong.
0.7130/35 comprising 50-day SMA acts as immediate resistance contrast to 0.7050 support.
The Australian Dollar (AUD) is taking the bids around 0.7100 versus the US Dollar (USD) during early Tuesday. The pair recently dropped to the day’s low near 0.7090 after RBA minutes and housing data disappointed Aussie buyers. Though, overall strong risk sentiment and expectations of a dovish FOMC result on Wednesday continue to favor the pair’s upside momentum.
Minutes of the recent Reserve Bank of Australia (RBA) meeting on March 05 conveyed significant uncertainties on the economic outlook while giving equal importance to both the directions of rate change depending upon the incoming data. Additionally, fourth quarter (Q4) house price index details dropped more than -2.0% forecast and -1.5% earlier on QoQ to -2.4% while yearly data marked -5.1% contraction versus -0.4% market consensus and -1.9% prior.
Except for initial reaction, traders cared less for the Australian data/events amid growing risk-on sentiment amid optimism surrounding Brexit. Adding to pair’s strength was expectations that recent drawdown in the US data might push the Federal Reserve to trim their 2019 rate-hike predictions from 2 lifts to only one.
While developments concerning Brexit and speculations for Wednesday’s FOMC event may continue playing background music for the AUD/USD traders, January month Factory Orders from the US could act as an immediate catalyst. The factory orders are expected to grow by +0.3% against +0.1% previous expansion.
AUD/USD Technical Analysis
50-day simple moving average (SMA) and a descending trend-line stretched since January 31 occupy 0.7130/35 resistance confluence that can challenge the AUD/USD pair’s near-term upside. Should the quote manage to cross 0.7135, 100-day SMA level of 0.7160, 0.7200 round-figure and 0.7230 level including 200-day SMA can please bulls.
Alternatively, 0.7050, 0.7020 and 0.7000 can entertain short-term sellers prior to questioning them with 0.6980 and 0.6950 supports.
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