AUD/USD leaps towards 0.7500 as RBA goes ahead with tapering plans
|- AUD/USD takes the bids, up around 30 pips, as RBA shows cautious optimism.
- RBA keeps the benchmark rate unchanged, keeps bond purchase reduction plans.
- Market sentiment dwindles amid mixed clues, receding virus fears battle caution ahead of US, Canada return.
- Risk catalysts keep the driver’s seat amid a light calendar, pre-ECB jitters.
AUD/USD jumps towards 0.7500, up 0.33% intraday near 0.7465 after the Reserve Bank of Australia (RBA) matches market consensus during early Tuesday. In doing so, the quote ignores the US dollar rebound from the day’s low and firmer Treasury yields.
The RBA keeps the benchmark interest rate at 0.1% while proving the market consensus right. In its rate statement, the Aussie central bank said to purchase government securities at rate of Australian dollar (AUD) 4.0 billion a week until at least mid February 2022.
Read: Breaking: AUD/USD jumps as RBA keeps rates on-hold, maintains tapering plans
Risk appetite fades initial optimism as the European traders brace for full markets. While portraying the mood, the US 10-year Treasury yields rise 2.2 basis points (bps) to 1.344% but stock futures and Asian shares trim early gains. With this, the US Dollar Index (DXY) benefits from the market’s indecision, picks up bids to pare losses around 92.15.
Behind the moves could be the mixed concerns over the coronavirus and vaccinations as well as central bank moves. Australia reports the third day of reduction in the covid 19 daily counts with the latest figures of 1,467.
On the data front, China reported strong trade numbers for August earlier in the day. The headline Trade Balance for August jumped past $51.05B to $58.34B, versus $56.59B prior. Details suggest the imports grew beyond 26.8% market consensus and 28.1% previous readout to 33.1% whereas Exports cross 17.1% forecast and 19.3% prior with 25.6% level.
Having witnessed an initial market reaction to the RBA announcements, AUD/USD traders will keep their eyes on the risk catalysts amid a light calendar and return of the full markets. That said, chatters over central bank moves amid the virus-led local lockdowns and vaccine optimism should entertain market players heading into the key European Central Bank (ECB) monetary policy meeting, up for publishing on Thursday.
Technical analysis
AUD/USD bears remain hopeful unless crossing a confluence of 100-day and 200-day EMA, followed by a downward sloping resistance line from early May around 0.7470–80. That said, an ascending support line from August 23, near 0.7410, challenges pullback moves.
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