AUD/USD grinds past 0.6700 on mixed Australia trade numbers, RBA, Fed Chair Powell eyed

• AUD/USD licks its wounds after a downbeat Monday, amid mixed Aussie trade data.
• Australia Trade Balance eased but Imports, Exports improved in January.
• Dicey markets ahead of top-tier data/events restrict the risk-barometer pair’s moves.
• RBA is up for 0.25% rate hike, Fed Chair Jerome Powell appears before Senate Banking Committee to testify.

AUD/USD prints mild gains to consolidate the week-start losses around 0.6730-35 during early Tuesday. In doing so, the Aussie pair cheers positives from the Australian Exports and Imports while paying a little heed to the downbeat trade surplus. It’s worth noting that the quote remains dicey so far during the day as traders await the key Reserve Bank of Australia (RBA) announcements, as well as the key Testimony from Federal Reserve (Fed) Chairman Jerome Powell.

Australia’s January monthly Trade Balance came in 11,688M versus 12,500M market forecasts and 12,237M previous readings. The details suggest that the Exports reversed the previous -1.0% with 1.0% growth while Imports rose 5.0% from 1.0% previous readings.

In addition to the upbeat Exports and Imports, comments from Aussie Prime Minister Anthony Albanese also seemed to have teased the AUD/USD buyers after a downbeat start to the key week. That said, Australia PM Albanese said earlier in the day, “I believe Australia can avoid a recession.” The policymaker also said that the relationship with China has improved.

Elsewhere, dicey markets ahead of the key RBA and Fed Chair Powell’s announcements join the fears emanating from the likely Sino-American tension, due to the anticipated meeting of the US and Taiwanese Officials, which seem to weigh on the AUD/USD pair.

It should be observed that softer prints of the second-tier US data, including ISM PMIs, Consumer Confidence and Durable Goods Orders joined comments from Atlanta Fed President Raphael Bostic to renew concerns about the policy pivot and weighed on the DXY in the last week, which in turn favored the AUD/USD bulls.

Amid these plays, US 10-year Treasury bond yields initially dropped to a one-week low of 3.897% on Monday before ending the day with mild gains near 3.96%, staying around the same level by the press time. On the same line, the two-year counterpart ended Monday’s North American trading session with 0.60% intraday gains at 4.88%, mostly unchanged at the latest. That said, Wall Street closed mixed and the S&P 500 Futures also struggle for clear directions.

Looking forward, AUD/USD traders may witness disappointment from the RBA if the central bank teases the policy pivot, which is highly expected. As per the market forecasts, the Aussie central bank is up for the likely last 0.25% rate hike during today’s monetary policy meeting.

Also read: Reserve Bank of Australia Preview: AUD/USD set to suffer on a dovish outlook

Following that, China's trade numbers and Fed Chair Powell’s testimony will be crucial to watch. Fed’s Powell appears before the Senate Banking Committee on Tuesday and should defend the US central bank’s hawkish bias to recall the AUD/USD bears.

Technical analysis

AUD/USD remains on the bear’s radar unless crossing the 200-DMA hurdle, around 0.6790 by the press time.