AUD/USD: Run-up to yearly top eyes RBA Meeting Minutes below 0.7800
|- AUD/USD bulls catch a breather around one-month high.
- Stimulus hopes, vaccine optimism joins receding virus fears to favor risks amid the quiet session.
- RBA minutes will be examined for reasons of QE extension, China remains close till Thursday.
AUD/USD stays firm near the monthly peak, easing from 0.7790 to 0.7785 off-late, as the Asian begins for Tuesday. The aussie pair began the week on a positive note despite holidays in the US and China, not to forget lockdown in Victoria, as market sentiments cheered anticipated nearness to the US coronavirus (COVID-19) stimulus and positive developments concerning the virus vaccines.
Also favoring the mood could be the updates suggesting notable positive impact post-vaccinations. Though, the quote pauses in its uptrend targeting the yearly high ahead of the latest monetary policy meeting minutes of the Reserve Bank of Australia (RBA).
RBA minutes in focus but bears have a little scope…
At 00:30 GMT, The RBA will release the monetary policy meeting of the recent meeting where it extended the Quantitative Easing (QE) while highlighting the failure to produce any meaningful wage inflation for years. As a result, skeptics will keep their eyes on the extra clues that can open doors for fresh selling near the multi-day high.
“We anticipate no real surprises in the RBA's minutes of the Feb Board meeting given the media blitz two weeks ago. Worth keeping attention on the downside and upside scenarios and any pointers for what could provoke changes in RBA thinking,” said TD Securities ahead of the event.
In addition to fewer tickets to the sellers, the market’s optimism also increases the odds of the AUD/USD upside. Among them, ex-US President Donald Trump’s acquittal for the Capitol Hill attack during the second impeachment trial offers an invisible hand to the optimism. The reason is that the Senators are spared from the political jostle and can concentrate on the much-awaited covid relief package.
Elsewhere, Israel’s data suggesting the reduction in the COVID-19 figures following the two jabs of Pfizer join the UK’s lowest infection data since October and the ability to reach the 15 million vaccination target brightens the mood. Furthermore, vaccine preparations in Australia, New Zealand and Japan add to the risk-on mood.
On the contrary, off in China and the US joins the global ire over chatters that Beijing isn’t cooperating on the covid tracing investigations to probe the bulls. Also challenging the sentiment are lockdowns in Melbourne and Auckland, coupled with the World Health Organization’s (WHO) warnings over virus re-infection.
Amid these plays, a sustained run-up by the US Treasury yields and upbeat equities favored the mood despite a lack of major moves.
Looking forward, RBA minutes will be in the spotlight while risk catalysts shouldn’t be ignored.
Technical analysis
Having breached a downward slopping trend line from January 06, AUD/USD is primed for refreshing the yearly top beyond 0.7820. However, the 0.7800 threshold seems to test the current moves. Any pullback may get seem unimportant before breaking the previous resistance line, at 0.7750 now.
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