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AUD/USD fails to cheer RBA's cautious optimism above 0.7700

  • AUD/USD extends recovery moves from intraday low, steps back of late, following RBA announcement.
  • RBA matches wide market expectations to keep benchmark rate, bond purchases unchanged.
  • Aussie data came in mixed during early Asia, risk-off seems to recently weigh on the quote.
  • US data, risk catalysts remain as the key to forecast near-term trade direction.

AUD/USD ticks up to 0.7755 before declining to 0.7745, down 0.23% intraday, following the RBA’s status-quo during early Tuesday. In doing so, the quote struggles to defy the risk-off mood even as the Aussie central bank remains cautiously optimistic.

The Reserve Bank of Australia (RBA) keeps its Cash Rate unchanged at 0.10% while also reiterating the 3-year bond yield target as 0.10%. The Aussie central bank also said, “Central scenario for GDP growth has been revised up further, with growth of 4¾ percent expected over 2021 and 3½ percent over 2022.”

Read: RBA: Central scenario for GDP growth has been revised up further

Earlier in the day, Australia’s weekly consumer sentiment data, Home Loans and Investment Lending for Homes came in strong. However, Aussie trade figures for March disappointed optimists not only the headlines Trade Balance but Imports and Exports also shrank during the reported period.

In addition to the downbeat data, challenges to the market sentiment also weighed on the AUD/USD prices during Asia. Among them, requests from Japan’s largest prefecture (by area) to take further measures to tame the coronavirus (COVID-19) and the absence of the RBNZ Governor due to the sickness in the upcoming meeting tested the bulls. Also on the risk-negative side were the updates from the three-day meeting of Foreign Ministers of the Group of Seven industrialized nations (G7) that discusses various issues ranging from geopolitical and trade fears from Russia and China to the coronavirus (COVID-19) in London.

Alternatively, economic optimism by the Fed policymakers and UK PM Boris Johnson seems to battle the bears. Though, off in China and Japan restricts the market moves.

Amid these plays, S&P 500 Futures drop for a third consecutive day while the US dollar index (DXY) nurses Monday’s losses by the press time.

Having witnessed the initial reaction to the key catalysts for AUD/USD pair, traders will keep their eyes on the market sentiment ahead of the US session for fresh impulse. Given the recent risk-off mood amid fresh covid concerns in Asia-Pacific, coupled with upbeat expectations from the US data, the pair may remain depressed for a while.

Technical analysis

Bulls and bears jostle between 0.7690 and 0.7820. While multiple highs marked during the last month define the upper limit, horizontal support area, comprising lows marked in late February and April, as well as March 29 top, portrays the range low.

Additional important levels

Overview
Today last price0.7741
Today Daily Change-20 pips
Today Daily Change %-0.26%
Today daily open0.7761
 
Trends
Daily SMA200.7715
Daily SMA500.7717
Daily SMA1000.7705
Daily SMA2000.7468
 
Levels
Previous Daily High0.7768
Previous Daily Low0.7706
Previous Weekly High0.7819
Previous Weekly Low0.7696
Previous Monthly High0.7819
Previous Monthly Low0.7531
Daily Fibonacci 38.2%0.7744
Daily Fibonacci 61.8%0.7729
Daily Pivot Point S10.7722
Daily Pivot Point S20.7682
Daily Pivot Point S30.7659
Daily Pivot Point R10.7784
Daily Pivot Point R20.7807
Daily Pivot Point R30.7847

Author

Anil Panchal

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.

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