- RBA maintains status-quo and helped regain some positive traction.
- US-China trade optimism/subdued USD demand remained supportive.
- Traders now look forward to the US ISM PMI for some short-term impetus.
The AUD/USD pair built on its post-RBA intraday positive move, with bulls making a fresh attempt to build on the momentum further beyond the 0.6900 handle.
Following the previous session’s pullback from the 0.6925-30 supply zone, the pair managed to catch some fresh bids on Tuesday after the Reserve Bank of Australia’s (RBA) decided to maintain status quo and leave interest rates unchanged at its November meeting.
Combination of factors remain supportive
The decision was on expected lines, though the central bank’s hawkish outlook turned out to be one of the key factors that provided a goodish lift to the Aussie. The central bank’s base scenario is for inflation to pick up gradually and growth to rise to around 3% in 2021.
Against the backdrop of renewed optimism over a possible US-China trade deal, absent dovish signals from the RBA extended some support to the China-proxy Australian Dollar and helped the pair to regain some positive traction during the Asian session on Tuesday.
The US Commerce Secretary Wilbur Ross on Sunday said that the licenses for American companies to export certain technology products to China’s Huawei would be issued very shortly and added to the recent indications that a trade deal could be signed later this month.
The uptick was further supported by a subdued US Dollar price action. However, some follow-through pickup in the US Treasury bond yields might help revive the USD demand and cap gains for the major, making it prudent to wait for a sustained move beyond the mentioned support zone.
Moving ahead, Tuesday’s US economic docket – highlighting the release of US ISM non-manufacturing PMI – will now be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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