AUD/USD pick-up bids toward 0.6800 after RBA’s status-quo
|- AUD/USD recovers from 0.6780 following the RBA’s no rate change decision.
- RBA statement praises the Aussie central bank’s performance.
- US dollar recovers from 11-week low amid unrest in the US probing the previous risk-on sentiment.
- China criticizes US President Trump’s take on the riots at home.
AUD/USD gains bids near 0.6790 after the Reserve Bank of Australia (RBA) announced no change in its monetary policy during the early Tuesday.
Read: RBA maintains Official Cash Rate at 0.25%, AUD/USD keeps the red below 0.68
Following the RBA decision, AUD/USD shuns the earlier bearish bias as the Aussie central bank praised the domestic financial system while also saying, “the depth of the downturn will be less than earlier expected.”
Read More: RBA: Accommodative approach will be maintained as long as it is required
Earlier during the day, the quote failed to keep its place near the highest since January 27 as risk-tone sentiment paused after the previous day’s upbeat performance. The reason for the cautious mood could be traced from the civil unrest in the US over the alleged killing of Minnesota’s George Floyd. While the riots have turned severe in New York and Washington, US President Donald Trump showed readiness to take all measures in taming the protests. China used this as an opportunity to criticize US President Trump.
Against this backdrop, US 10-year Treasury yields paused their previous day’s run-up around 0.65% whereas stocks in Australia struggle for direction.
It should also be noted that Australia’s first quarter (Q1) Current Account Balance and Company Gross Operating Profits flashed upbeat reading during the early-Asian session. Though, downbeat trading sentiment pushed the quote lower.
Having witnessed the initial reaction to the RBA’s monetary policy meeting decision, the Aussie traders are likely to keep eyes on the headlines from the US to determine near-term risk sentiment. In doing so, protests in the alleged police killing of George Floyd as well as comments from China and Hong Kong will be the key to follow.
Should the risk-tone remains heavy, amid the unrest in the US, the greenback can extend its recent pullback moves from the multi-day low.
Technical analysis
An ascending trend line from April 14, currently around 0.6815/20, restricts the pair’s immediate upside amid overbought RSI conditions. As a result, sellers might want to enter fresh positions targeting March high surrounding 0.6685. Though, a clear upside past-0.6820 will escalate the quote’s rise towards the early-January lows near 0.6850.
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