“¢ Bulls failed to capitalize on the overnight uptick supported by upbeat Chinese data.
“¢ RBA’s decision to maintain status-quo prompts some aggressive selling on Tuesday.
“¢ The prevalent USD buying interest further adds to the sharp intraday bearish slide.
The AUD/USD pair held on to its post-RBA weakness, albeit has managed to recover around 20-pips from the 0.7065 horizontal support area.
After an initial uptick to the 0.7130 region, back closer to upbeat Chinese manufacturing data-led swing high touched in the previous session, the pair met with some aggressive supply after the RBA decided to leave interest rates on hold at the historic low of 1.5% for the 29th consecutive meeting.
However, the fact that both economic growth and inflation continuing have been undershooting forecasts, market participants have already started pricing in a full 25 basis point rate cut by September and was seen as one of the key factors weighing heavily on the Australian Dollar.
The pair was further pressurized by the prevalent positive tone surrounding the US Dollar, which remained supported by Tuesday’s stronger than expected ISM manufacturing PMI and seemed largely unaffected by a sharp pull-back in the US Treasury bond yields.
The bearish pressure now seems to have abated, at least for the time being, as market participants now look forward to the latest release of US durable goods orders data for February for some fresh impetus and in order to grab some short-term trading opportunities.
The key focus, however, will be on Friday’s closely watched US monthly jobs report – popularly known as NFP, which will influence the near-term USD price dynamics and eventually help determine the pair’s next leg of a directional move.
Technical levels to watch
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