AUD/USD meets support near 0.7100, 200-hour SMA
|- The Aussie Dollar comes under pressure near the 0.7100 handle.
- The RBA confirmed the recent dovish stance.
- AUD vigilant on upcoming jobs report (Thursday).
The Aussie Dollar is prolonging the negative start of the week and is forcing AUD/USD to recede further ground and test lows in the vicinity of the 0.7100 handle.
AUD/USD weaker post-RBA
Spot remains on the defensive today amidst a better mood surrounding the greenback and the neutral tone from the recently published RBA minutes.
In fact, the RBA confirmed its recent shift to a more neutral stance, in line with the latest speech from Governor P.Lowe. At today’s minutes, the RBA once again reiterated the risks stemming from declining house prices and its impact on consumption, inflation and, ultimately, GDP figures. However, members showed some optimism backed on expectations of lower unemployment and increasing consumer prices.
Next of relevance in the Aussie docket will be release of Wage Prices (Wednesday) and the more relevant labour market report (Thursday). In the US calendar, the speech by Cleveland Fed L.Mester (non-voter, hawkish) is due next along with February’s NAHB index.
What to look for around AUD
The Aussie Dollar keeps waiting for fresh headlines from the onging US-China trade talks against the backdrop of rising optimism on the probability that a deal could be clinched sooner than later. In this regard, market chatter has practically priced in an extension of the 90-day truce deadline (originally on March 1). On the not-so-optimistic side, the renewed neutral stance from the RBA should limit a more serious rally in AUD. It is worth recalling that the central bank cut its growth projections on the potential slowdown in China, the correction in the domestic house sector and potential trade jitters.
AUD/USD levels to watch
At the moment the pair is losing 0.14% at 0.7119 and a breakdown of 0.7102 (10-day SMA) would aim for 0.7075 (low Jan.25) and finally 0.7054 (low Feb.12). On the flip side, the next hurdle emerges at 0.7160 (high Feb.18) seconded by 0.7161 (100-day SMA) and then 0.7271 (200-day SMA).
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