AUD/USD drops to 0.6790 after RBA minutes portray the board’s dovish bias

Given the RBA’s sustained support for east money policy, AUD/USD ticks down to 0.6790 after the minutes statement of the latest monetary policy during early Tuesday in Asia.

In its minute statement of the November month monetary policy meeting, the Reserve Bank of Australia (RBA) held its bearish bias intact while showing readiness to act further if needed. Traders were looking for any clues concerning the statement that the Board was mindful that rates were already very low and that each further cut brings closer the point at which other policy options come into play.

Read More: RBA minutes: Board prepared to ease policy further if needed (AUD lower)

In addition to the CNBC’s news portraying Chinese diplomats’ lack of optimism surrounding the phase one deal with the US, reiteration of “One Country, Two Systems” motto by Chinese President highlights the dragon nation’s stand over the protests in Hong Kong and dislike for the US interruption.

Elsewhere, the US Federal Reserve (Fed) speakers have been praising their current monetary policies while also avoiding any downbeat comments off-late. Further, the US President Donald Trump discussed monetary policy, the US dollar (USD) and Chinese trade deal with the Fed Chair Jerome Powell but no clues on the outcome were given.

As a result, the 10-year US Treasury yields stay on the back foot near 1.80% with the S&P 500 Futures taking rounds to 3,117, -0.16%, by the press time.

Traders will now be on the lookout for the second-tier housing data from the United States (US), coupled with a speech from the President of the Federal Reserve Bank of New York, John C. Williams, for fresh impulse. Though, it doesn’t dim the prospects of trade/political headlines to move the markets.

Technical Analysis

Pair’s failure to cross 50-day Simple Moving Averages (SMA), at 0.6815 now, gradually drags the quote towards 0.6770 and then to 0.6720. However, October 09 low near 0.6700 and the previous month bottom surrounding 0.6670 could restrict the pair’s further declines. On the contrary, 50 and 100-day SMAs limit pair’s immediate moves around 0.6815 and 0.6840 respectively ahead of 0.6900.