- AUD/USD remains mildly offered after the RBA matched market forecasts.
- RBA announces a 0.15% rate cut, an A$ 100 billion worth of QE.
- Recent polls suggest an interesting race between Trump and Biden in certain states, risks remain mildly positive.
- US election updates will be the key, virus woes can offer intermediate moves.
AUD/USD wobbles around 0.7050 even after RBA’s once in many moves during the early Tuesday. Even so, the quote prints mild intraday losses. The pair defied a three-day losing streak on Monday as the US dollar stepped back from a one-month high.
The Reserve Bank of Australia (RBA) matches wide market expectations of announcing a 0.15 rate cut to the benchmark Interest Rate and the 3-year yield target, now at 0.10%. The Aussie central bank also adds the Australian dollar 100 billion of the Quantitative Easing (QE) to the offering. As the move isn’t a surprise after RBA Governor Philip Lowe’s recently dovish comments, AUD/USD portrays a knee-jerk reaction to the otherwise key actions.
Read: RBA: Board prepared to do more if necessary
While RBA’s action offered life to the global markets, cautious optimism concerning the US 2020 presidential race, starting from today, favors risk barometers in Asia. On the contrary, China’s latest pause to the Aussie lobsters as well as the coronavirus (COVID-19) wave 2.0 tries to challenge the upbeat sentiment.
While portraying the mood, S&P 500 Futures rise 0.60% intraday whereas Australia’s ASX 200 gains over 1.5% by press time.
Having witnessed initial reaction to the RBA’s monetary policy moves, AUD/USD traders will wait for Friday’s monetary policy statement for clear direction. However, the immediate market attention will be on the US elections where the current President Donald Trump is trying to defy the polls suggesting a blue wave, a condition where the Democratic Party dominates in both the American houses.
Read: 2020 Elections: Three states traders should watch, plus places that could provide surprises
Technical analysis
AUD/USD marks another failure to cross 100-day EMA, currently around 0.7065, which in turn highlights the importance of the 0.7000 psychological magnet for the bears. Though, any further weakness below the 0.7000 round-figure will be probed by a 200-day EMA level around 0.6950.
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