AUD/USD fades upside momentum near one-week high above 0.7200 after RBA minutes
- AUD/USD eases from the one-week high as RBA policymakers stay, as per the latest minutes.
- Risk-tone recovers amid a light calendar day, better-than-forecast weekly consumer sentiment for Australia adds to the pair’s strength.
- The city of Sydney added to NSW’s COVID-19 hotspots, Victoria marked 222 new cases, the lowest in a month, with death toll being 17.
- US housing market data, risk catalysts awaited for fresh impulse.
AUD/USD drops to 0.7220 during the early Tuesday. In doing so, the aussie pair react to the latest RBA minutes from the August month’s monetary policy meeting. Even so, the quote remains close to the one week high and flashes a three-day winning streak by the press time.
RBA minutes confirm the policymakers’ dovish bias while citing the pandemic. The same joined the recent weakness in the risk-on mood to weigh on the AUD/USD prices after the release.
Read: RBA Minutes: Accomadative approach as long as needed
Earlier during the day, the pair cheered weekly prints of Australia’s ANZ-Roy Morgan Consumer Sentiment Index that crossed 86.5 prior with 88.6 figures.
Other than the upbeat data, the lowest prints of the coronavirus (COVID-19) cases in Australia’s epicenter Victoria also helps the aussie pair to remain firm. The latest figures from ABC suggest new cases rose 222 while there were 17 more deaths due to the pandemic on Monday. The figures were the lowest since July 18. However, news that the city of Sydney was added to the New South Wales (NSW) COVID-19 hotspot capped the optimism.
Elsewhere, the US-China tussle continues with the latest headlines suggesting further hardships for Huawei’s products and arrest of a former CIA agent while terming him as China’s spy. Furthermore, American Congress members refrain from signaling any talks on the much-awaited stimulus while China cited anti-dumping probe on Aussie wines amid the light calendar.
Against this backdrop, S&P 500 Futures fade the early-day optimism while the US 10-year Treasury yields soften to 0.675% by the press time. Moving on, Australia’s ASX 200 mark 0.12% gains while Japan’s Nikkei drops over 0.50% as we write.
Having witnessed the initial market reaction to the RBA minutes, the AUD/USD prices will take clues from the risk-tone sentiment ahead of the US session. In doing so, virus headlines and the Sino-American updates will be the key to watch. During the American session, housing market data and clues for the stimulus will join speech from Lael Brainard, a member of the US Federal Reserve's Board of Governors to offer fresh directions.
Technical analysis
Bulls are waiting for the clear break of the monthly top surrounding 0.7245 while eyeing the year 2019 top near 0.7300. On the contrary, 0.7200 round-figures and 21-day SMA close to 0.7160 can defend the pair’s further downside.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
