- RBA signals that it’s in no rush to hike rates.
- Comments from China on trade dispute help the AUD gather strength.
- US Dollar Index turns flat near 95.70 ahead of the NA session.
The AUD/USD pair preserved its bullish momentum on Tuesday and rose to its highest level in eleven days at 0.7365. However, the pair erased the majority of its daily gains in the last couple of hours as the greenback started to gather strength and it was last seen trading at 0.7345, where it was up only 0.08%, or 6 pips, on the day.
During the Asian session, the RBA published the minutes of its last meeting, which highlighted that the bank was in no rush to make a policy move in the near-term and reiterated that the next rate move was likely to be up if they were to see the progress made on the unemployment and the inflation. Markets didn’t show an unusual reaction to the publication as it didn’t offer any significant surprises.
Meanwhile, the optimistic comments from Chinese officials despite US President Donald Trump’s view that it was unlikely for them to reach an agreement in Washington later this week boosted the China-sensitive currencies such as the aussie. Chinese foreign ministry stated that they wanted to settle the trade dispute with the US via negotiations and added that they were hopeful that both sides could reach a good outcome.
On the other hand, the greenback extended downfall that started on Monday after Trump reiterated his disagreement with the Fed’s monetary policy strategy and the US Dollar Index fell to its lowest level since August 10 at 95.45. Nevertheless, the index seemed to have shaken off the bearish pressure and was last seen virtually unchanged on the day at 95.72.
Technical levels to consider
The immediate support for the pair could be seen at 0.7335 (20-DMA) ahead of 0.7250 (Aug. 17 low) and 0.7160 (Dec. 23, 2016, low). On the upside, resistances align at 0.7375 (50-DMA), 0.7450 (Aug. 9 high) and 0.7500 (psychological level).
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