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  • AUD/USD pierces 0.6700 as the RBA not only refrained from rate alteration but also a bit positive on its economic outlook.
  • The US traders’ return, manufacturing PMIs, and US-China trade tussle will be in the spotlight for now.

With the Reserve Bank of Australia (RBA) holding back its rate change trajectory, coupled with the upbeat economic outlook, AUD/USD crosses 0.6700 during early Tuesday.

The RBA left its cash rate unchanged to 1.0% during today’s monetary policy meeting. The Aussie central bank also sounds optimistic when it comes to employment and economic growth expectations while showing concerns for inflation. It should also be noted that the Aussie central bank refrains from providing any clear signs of further rate cuts while remaining on “wait and see” approach.

Read:  RBA: To ease policy if needed to support sustainable growth

Even so, the US-China trade stalemate continues to weigh on the AUD/USD pair while the US Dollar’s across board strength, backed by the US return after Monday’s Labor Day Holiday, exert additional downside pressure on the quote.

Earlier during the day, the Aussie fell as Australia’s August month seasonally adjusted Retail Sales figures for July that dropped below 0.2% expectations to -0.1%. It should also be noted that traders ignored the second quarter (Q2) Current Account Balance that grew past-1.4B forecast and -2.9B prior to 5.9B.

Given the initial market reaction to the RBA’s announcement, investors will now focus on how the US traders will react to the latest US-China trade news, which is less positive with no clear dates of negotiation. Additionally, August month US Purchasing Managers’ Index (PMI) numbers from Markit and ISM will also be in the spotlight for now.

Technical Analysis

While bears aim for August month low of 0.6677, the further downside can drag the quote to mid-March 2009 lows near 0.6530 during additional south-run. Meanwhile, pair’s upside break of week-old falling trend-line at 0.6725 can propel prices to 21-day exponential moving average (EMA) level of 0.6771.