AUD/USD pierces 0.7200 even as RBA keeps status-quo
|- AUD/USD rises 20 pips following the RBA’s announcement of no rate change.
- Previous risk-on mood fades amid mixed clues concerning US President Trump’s recovery.
- Aussie budget, updates on Trump’s COVID-19 developments and Powell’s speech will in focus.
AUD/USD seesaws around 0.7200 after an initial surge to 0.7208 on the Reserve Bank of Australia’s Interest Rate decision during early Tuesday. The Reserve Bank of Australia (RBA) held its cash rate and the targeted yield on 3-year bonds unchanged at 0.25% during the latest announcement.
Read: RBA: Will maintain highly accommodative settings as long as is required
Elsewhere, the global risk tone failed to keep up the previous day’s positive mood as US President Donald Trump gasped, while trying to prove he is “20-years younger”, during the latest video. Also adding to the market chatters that Trump isn’t well were the White House announcements ordering people to wear PPE kit while nearing Mr. President and also stating the 24-hour case for the Republican leader. Further, no schedules for Tuesday for the US President Trump also pushed market players to become cautious.
It’s worth mentioning that China recently rekindled expectations of the Sino-American tussle by criticizing the US ban on TikTok and WeChat at the World Trade Organization (WTO). Though, the news got a few accolades as Beijing is out for cheering the Golden Week Holidays till this Thursday.
Amid all these plays, S&P 500 Futures seesaws below 3,400 whereas stocks in Asia-Pacific print mild gains. Additionally, the US 10-year Treasury yields also take rounds to 0.76% after marking over eight basis points (bps) of rising during the previous day.
Looking forward, AUD/USD traders will keep eyes on the government’s budget for immediate direction. While the PM Scott Morrison and Company has already announced spending plans, odds of tax cuts are also on the hike. As a result, any such announcement will help the quote to regain its stand above 0.7200.
Also in the line is the speech from the Federal Reserve Chairman Jerome Powell who will be speaking about the US economic outlook at the National Association of Business Economics annual meeting. Above all, US President Trump’s recovery moves will be closely followed for near-term market performance.
Technical analysis
Despite failing to cross the confluence of 21-day and 50-day SMA, around 0.7200-10, AUD/USD buyers should keep the reins unless witnessing a downside break of 10-day SMA level near 0.7120.
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