AUD/USD seesaws around 0.7400 even as RBA’s Lowe sounds cautiously optimistic
|- AUD/USD remains sidelined after the previous day’s upbeat performance.
- RBA’s Lowe cites gradual pick-up in inflation, employment and pandemic-led challenges to justify central bank’s moves, stays optimistic for 2021.
- Stimulus optimism, US data earlier favored bulls, pre-NFP caution restricts market moves of late.
- RBA Monetary policy statement, China data in focus ahead of the US jobs report.
AUD/USD pays a little heed to RBA Governor Philip Lowe’s testimony before the House of Representatives Standing Committee on Economics, taking rounds to 0.7400, amid Friday’s Asian session. In addition to the RBA’s Chief’s resistance to offering any fresh signals, the pre-NFP trading lull also challenged the pair traders. Furthermore, China trade numbers and RBA Monetary Policy Statement also lined up and keep the quote pressured.
In his latest testimony, RBA Governor Lowe sounds optimistic for 2021 economic growth while rejecting recessionary fears. The policymaker said, per Reuters, “Economy has bounced quicker than forecast” while also adding, “Central scenario sees GDP increasing by a little over 4 percent in 2022, to be followed by growth of around 2.25 percent in 2023.”
Read: RBA's Lowe speaks at the House of Representatives Standing Committee on Economics
Given the absence of any strong direction and a push for fiscal measures, AUD/USD remains tight-lipped as the comments are flowing.
It’s worth noting that the mixed sentiment concerning the Delta covid variant’s economic impact on the US and a jump in the numbers also challenge the pair traders.
On the positive side, hopes of US stimulus passage and Fed policymakers’ little pessimism over the virus strain back equities and favor AUD/USD buyers. However, firmer US Treasury yields do test the upside momentum.
Looking forward, the pair traders will keep their eyes on the RBA Monetary Policy Statement to reconfirm Governor Lowe’s cautious optimism and the early week’s tapering chatters. Following that, China’s trade numbers for July and the US employment data will be the key to follow.
Read: Nonfarm Payrolls Preview: Why the dollar could surge in (almost) any scenario
Technical analysis
AUD/USD struggles between a 0.7400–0.7410 resistance area comprising level marked since early July and 21-DMA level surrounding 0.7395. However, bullish MACD signals do favor the buyers to aim for June’s low near 0.7480 during further advances.
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