AUD/USD retreats from 1-1/2 week tops, but holds above 0.70 handle

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  • Dovish sounding RBA meeting minutes prompt some selling on Tuesday.
  • A modest pickup in the USD demand exerts some additional pressure. 
  • Traders now eye US retail sales and Powell’s speech for a fresh impetus.

The AUD/USD pair slipped to fresh session lows, around the 0.7030-25 region in the last hour, eroding a part of the previous session’s positive move. 

Having touched a 1-1/2 week high level of 0.7045, the pair witnessed a modest pullback after the RBA July policy meeting minutes revealed that the policymakers are willing to adjust policy “if needed” to support growth and inflation.

The pair now seems to have snapped four consecutive days of a winning streak and was further weighed down by a modest pickup in the US Dollar demand, supported by an uptick in the US Treasury bond yields and cautious mood around equity markets.

It would now be interesting to see if the China-proxy Australian Dollar is able to attract any fresh buying at lower levels or retreats further amid persistent uncertainties over a possible resolution to the prolonged US-China trade disputes.

Later during the early North-American session, the US economic docket – featuring the release of monthly retail sales figures, followed by a scheduled speech by the Fed Chair Jerome Powell will now be looked upon for a short-term trading impetus.

Technical levels to watch

 

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