AUD/USD drops around 10-pips after Monday’s upbeat performance. Market’s mood remains upbeat with US President Donald Trump out of Walter Reed with much better health conditions. Hopes of US stimulus, soft Brexit manage to dim skyrocketing White House COVID-19 cases. RBA to keep status-quo, tax cuts are highly anticipated from Federal Budget. AUD/USD declines to 0.7180 at the start of Tuesday’s Asian session. In doing so, the aussie pair consolidates Monday’s gains below the 0.7200 threshold ahead of the key day comprising the RBA Interest Rate Decision and Budget Release, respectively around 03:30 GMT and 08:30 GMT. The risk-on markets could be traced for Monday’s mildly positive performance of the quote, not to forget about upbeat prints of second-tier data at home. Optimists catch a breather… Global markets cheered recovery in US President Trump’s health conditions on Monday, after Mr. and Mrs. Trump contracted the coronavirus (COVID-19) on Friday. The mood got additional support from news that US House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin are rolling their sleeves, again, for jostling over the much-awaited COVID-19 aid package. Further, no noise surrounding the Sino-American tension joins hands with renewed hopes of a soft Brexit, as the European Union (EU) and the UK are up for one more month of talks, also favored the risk-on sentiment. It’s worth mentioning that the odds of a sweeping victory of the Democratic Party in the US Presidential Election, up in November, offered an additional boost to the market optimism. The reason could be linked to their support for heavy stimulus. On the contrary, a slew of names recently infected by the deadly virus keep rolling out from the White House and tried to probe the risk-takers, but failed. Additionally, concerns over the global economic comeback also questioned the bulls. Against this backdrop, Wall Street benchmarks closed above 1.0%, Nasdaq up 2.32%, whereas the US 10-year Treasury yields gained 8.4 basis points to 0.778% by the end of Monday’s North American session. On the data front, Australia’s Commonwealth Bank PMIs, TD Securities Inflation and NAB Business Sentiment data all managed to post upbeat outcomes. On the other hand, US ISM Services PMI also crossed 56.3 prior to 57.8 and added fuel to the market’s cheer. Looking forward, AUD/USD traders are likely to remain pressured awaiting the important events. The RBA is expected to keep the benchmark rate unchanged at 0.25% but the tone of the rate statement will be the key as Deputy Governor Guy Debelle recently cited a mismatch between the outlook for inflation and employment with the Bank’s objectives. Read: Reserve Bank of Australia Preview: Paving the way for more stimulus Further, the Australian government has already signaled a A$7.5 billion boost for transport infrastructure and might announce tax cuts to woo the voters. Considering this, analysts at the Australia and New Zealand Banking Group (ANZ) said, “In our forecasts we assumed that the stage 2 tax cuts currently set for 2022 would be brought forward to 1 July 2021, so back-dating these to 1 July 2020 would be earlier than expected. However, we have also assumed that the Government will provide substantial additional direct income support to households in Q4 of this year. A bring-forward of the stage 2 tax cuts to 1 July 2020 will broadly match this assumption and so not necessarily represent a boost over and above what we have already factored – although the fiscal multiplier for tax cuts is likely to be lower than for direct payments to welfare recipients. Of course, the overall fiscal boost to the economy will depend on all the moving parts.” Other than the top-tier events, Australian trade numbers for August and ANZ Job Advertisements for September can also entertain AUD/USD traders. Technical analysis Another miss to cross the 21-day and 50-day SMA confluence, currently around 0.7200-10, on the daily closing keep the AUD/USD bears hopeful. Though, 10-day SMA around 0.7120, followed by the 0.7100 round-figure, offers near-term strong support. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Gold Price Analysis: XAU remains under a key level and it will need to be broken if the bulls are to take control again FX Street 2 years AUD/USD drops around 10-pips after Monday’s upbeat performance. Market’s mood remains upbeat with US President Donald Trump out of Walter Reed with much better health conditions. Hopes of US stimulus, soft Brexit manage to dim skyrocketing White House COVID-19 cases. RBA to keep status-quo, tax cuts are highly anticipated from Federal Budget. AUD/USD declines to 0.7180 at the start of Tuesday’s Asian session. In doing so, the aussie pair consolidates Monday’s gains below the 0.7200 threshold ahead of the key day comprising the RBA Interest Rate Decision and Budget Release, respectively around 03:30 GMT and 08:30 GMT. 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