- Investors remain cautious ahead of the key RBA decision.
- In addition to a 0.25% rate cut, comments/statement from the central bank will also grab market attention.
With all eyes on the upcoming retail sales and RBA’s rate decision, the AUD/USD clings to 0.6975 during the early Asian session on Tuesday.
Unearthed speculations of the Federal Reserve’s rate cut, mainly due to recently downbeat data and comments from the US monetary policymakers, contributed towards across the board weakness of the US Dollar (USD) on Monday.
In addition to the greenback weakness, the Aussie pair also benefited from better than forecast Caixin manufacturing PMI data from China, its largest customer.
While April month retail sales and current account from Australia data could offer intermediate momentum to markets, investors are more interested in the details of the Reserve Bank of Australia’s (RBA) monetary policy meeting due to the expectations of first rate cut since July 2016.
Seasonally adjusted retail sales may soften to 0.2% from 0.3% whereas the first quarter current account balance may improve to -2.5 billion from -7.2 billion.
The RBA is highly expected to announce a quarter percentage change into its benchmark cash rate considering sluggish data home and challenges to global trade and its largest customer due to the US-China trade tussle.
Even if traders will closely observe the RBA rate statement for details of future policy moves, comments from Governor Philip Lowe at the RBA Board dinner with the business community will gain major attention.
Technical Analysis
Not only March month bottom around 0.7000 but 50-day simple moving average (SMA) near 0.7030 and 100-day SMA surrounding 0.7080 could also question Aussie buyers, which in turn highlights the importance of 0.6940 and 0.6900 support levels during the pullback.
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