AUD/USD analysis: cautious ahead of RBA monetary policy meeting
|AUD/USD Current price: 0.7227
- RBA expected to keep rates at record low, reiterate "no strong case" for a near-term adjustment.
- Solid advance in worldwide equities barely enough to keep the Aussie afloat.
The AUD/USD pair traded is a well-limited range, finding buyers on intraday slides toward the 0.7200 figure and sellers on attempts to recover beyond the 38.2% retracement of its September recovery at around 0.7225. Cautious prevailed ahead of the upcoming RBA monetary policy announcement, despite the central bank is not expected to say something new. Intraday news should have benefited the Aussie, as the local September AIG Performance of Manufacturing Index came in at 59.0, up from 56.7 in August as recording a 24th consecutive month of expansion. Commodities were up, with oil prices soaring to multi-year highs, while worldwide equities stayed in the green, amid news that the US and Canada reached a trade deal, which took off most of the uncertainty limiting rallies.
As for the RBA, seems unlikely that Lowe and Co. could surprise the markets with something new related to the monetary policy. In their latest meeting, policymakers made it clear that there's "no strong case" for a near-term adjustment there, while it seems unlikely they could change their current assessment of the risk posed to the economy from global trade tensions, as there is no light at the end of the tunnel for the US and China.
The pair heads into the key event with a neutral-to-technical stance according to technical readings in the 4 hours chart, as beyond the mentioned Fibonacci resistance, the pair was also unable to recover above a bearish 20 SMA, which extends its decline below the 200 SMA. Technical indicators in the mentioned chart hover around their midlines, with modest upward slopes that fell short from confirming an upward extension ahead.
Support levels: 0.7190 0.7155 0.7120
Resistance levels: 0.7255 0.7300 0.7335
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