AUD/USD recedes from three-day top to sub-0.6950 area after RBA minutes
|- AUD/USD fails to keep the upside momentum even if RBA minutes offer mostly upbeat signals.
- Australia’s House Price Index (Q1) slipped below 2.7% forecast to 1.6% on QoQ.
- Market’s trading sentiment stay upbeat following the Fed-led action, US-China headlines add to the optimism.
- Mixed updates on the coronavirus, cautious sentiment ahead of Fed Chair’s testimony probe the bulls.
AUD/USD weakens to 0.6940 after the RBA minutes on early Tuesday. Given the mostly upbeat minute statement, the pair’s latest declines could be traced from Australia’s quarterly housing market data. However, the market’s broad optimism still favors the Aussie bulls.
Read: RBA Minutes: Three-year yield target to be maintained until full employment, inflation goals reached
RBA minutes showed the Australian central bank’s readiness to extend the policy support as long as required. The statement also cited the downside risks of the coronavirus (COVID-19) on the Aussie economy.
Also simultaneously released was Australia’s House Price Index for the first quarter (Q1). The reading suggests weakness in the Aussie housing market with the figures declining below 2.47% forecast to 1.6%.
The weekly employment data from the Australian Bureau of Statistics (ABS) offer additional insights over the pair’s latest moves. The ABS said that Payrolls rose 0.40% during the week ending on May 30. Additional details suggest that the Jobs Losses are at 7.5% by the end of May from peak loss of 8.9% in mid-April.
Even so, the pair bulls are fewer worries amid the broad risk-on sentiment. The market’s trading sentiment recently improved after the US Federal Reserve announced to purchase corporate bonds. Also supporting the optimism could be the US government’s permission of four Chinese flight week entry to Beijing airlines. Further, the expectations of the US-China talks in Hawaii during the week add strength to the upside momentum. However, fears of the virus outbreak from the dragon nation and the US keep the risk-on sentiment chained.
Amid all these plays, the US 10-year treasury yields gain over three basis points to 0.73% whereas Australia’s ASX 200 rise more than 3.0% to flash 5,893 as a quote.
Looking forward, the Asian economic calendar seems ran out of major data/events to direct the pair. As a result, traders will for the US Federal Reserve Chairman Jerome Powell’s Testimony and US Retail Sales data for immediate impulse. Even so, the qualitative risk catalysts concerning the virus and the US-China relations will keep the driver’s seat.
Technical analysis
Not only 0.7000 round-figure but the recent high surrounding 0.7065 as well as July 2019 tops near 0.7085 add upside barriers to the pair’s further north-run. Alternatively, Monday’s bottom near 0.6775 and an ascending trend line from April 03, at 0.6700 now, can question the pair’s short-term declines.
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