- AUD/USD picks up bids to piece the intraday top.
- US President Biden told GOP senators hope rescue plan can pass with bipartisan support.
- Risks earlier dwindled on Republican Senator Collins’ downbeat comments, GME drop and further restrictions on Silver.
- RBA is expected to keep the interest rates unchanged, tone on price pressure, QE will be the key.
AUD/USD rises to 0.7648, currently up 0.32% near 0.7644, during early Tuesday. The pair traders recently cheered upbeat comments from US President Joe Biden after he met the Republicans (GOP) members of the Senate. Further, upbeat comments from China also favor AUD/USD buyers. Even so, the bulls are cautious ahead of the Reserve Bank of Australia’s (RBA) meeting.
Following Republican Party Senator Susan Collins’ comments suggesting no agreement on the package, US President Joe Biden cited “substantive and productive” discussions while signaling hopes to pass the much-awaited aid package with bipartisan support. The Democratic leader also said, there are many areas where the Republican coronavirus relief proposal does not address urgent issues, which in turn increases the urgency of the relief package.
Furthermore, Boston Fed Bank President Eric Rosengren and Atlanta Fed President Raphael Bostic reiterated the need for further stimulus amid economic uncertainty.
Also favoring the mood could be the latest comments from a Senior Chinese diplomat Yang Jiechi who said, per Reuters, that China is prepared to work with the US to move the relationship forward along the track of no conflict, no confrontation, mutual respect and win-win cooperation.
Elsewhere, CME hikes margin requirements for silver trading by 17.8% whereas Gamestop prints a three-day losing streak while directing the consolidative moves toward the $200 threshold.
Amid these plays, S&P 500 Futures reverse early-day losses while printing 0.40% intraday gains by press time. Also, the US 10-year treasury yields part ways from the previous day’s downbeat momentum while rising to 1.08%.
Looking forward, the RBA rate decision will be the key as Aussie fundamentals have been mixed off-late. While the employment strength battles with inflation weakness, RBA’s likely extension, or addition, to the Quantitative Easing (QE), can’t be ruled out. However, no rate change is expected to take place in today’s meeting.
Should the RBA surprises markets by being optimistic, despite the latest virus woes and mixed data, AUD/USD is likely to regain 0.7700 mark.
Read: Reserve Bank of Australia Preview: Policy on hold, improved economic outlook
Technical analysis
50-day SMA near 0.7600 helps AUD/USD buyers to attack a one-week-old resistance line around the mid-0.7600s. 21-day SMA near 0.7720 offers key resistance.
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