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AUD/USD clings to mid-0.6800s ahead of Aussie housing data, RBA meeting minutes

  • AUD/USD adopts wait and see mode ahead of Australia data, RBA minutes.
  • Risk-off remains on the card, China’s goodwill gestures raise hopes of better US-China trade talks.
  • Investors will look for clues of further easing from RBA minutes.

Having been chopped between increasing commodity prices and a broad risk-off, AUD/USD stays around 0.6860 during initial Tuesday morning in Asia.

While weekend attacks over Saudi Arabia have been the main catalysts for recent risk-off, the EU-US trade tension adds worry to the market sentiment after the Trump administration won a go-ahead from the World Trade Organization to impose retaliatory tariffs on the EU over a long-running dispute against Airbus.

As a reaction, equities dipped with treasury yields while commodity front got support despite disappointing outcome from China’s August month data-dump including Retail Sales, Industrial Production and Fixed Asset Investment.

Recent news from Washington Post, and also from the NBC, support the US claims that Iran was behind Saudi Arabian attacks. On a different note, the US Department of Justice (DOJ) recently arrested a Chinese government employee for visa fraud, the same could negatively affect the US-China relations that have been recently improving due to the goodwill gestures from both the countries.

Investors will now look forward to the Second Quarter (Q2) house price index and minutes for the Reserve Bank of Australia’s (RBA) latest monetary policy meeting. While Australia’s Q2 Housing data might suggest improvement by rising to -1.0% from -3.0%, markets will be particularly cautious for the RBA minutes even if the central bank reiterated its “wait and see” approach during the recent decision.

Technical Analysis

Unless breaking the 55 pips area between the 50-day and 100-day exponential moving averages (EMA), near 0.6845 and 0.6900 respectively, prices are less likely to register much movement. Adding to the downside pressure is July 10 low close to 0.6910.

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