AUD/USD: Further upside stalls around 0.6800 ahead of RBA

AUD/USD bulls catch a breather around 0.6800 during the Asian session on Tuesday. While the recently flashed Aussie data triggered the quote’s uptick from 0.6789 to 0.6796, the quote stays below the early-day top, also the highest since late-January, around 0.6815.

Australia’s first quarter (Q1) Current Account Balance grew beyond 6.3 B forecast to 8.4 B whereas Company Gross Operating Profits also beat 0.0% expectations and -3.5% prior with a 1.1% increase.

Despite the upbeat data, a shift in the market’s trading sentiment seems to have challenged the Aussie bulls off-late. Protests against the US police’s alleged killing of Minnesota’s George Floyd turn severe as rioters have recently started looting shops and occupied places near the White House.

While the deployment of the military in the Washington and curfew in New York are some of the initial measures to combat the unrest, US President Donald Trump showed readiness to use all resources, be it military or social, to tame the riots.

Against this backdrop, US 10-year Treasury yields drop nearly one basis point to 0.65% while S&P 500 Futures drop 0.40% to 3,0404. The cautious sentiment seems to have put a floor under the US dollar index (DXY) that bounces off 11-week low to 97.82 by the press time.

Trader may now keep eyes on monetary policy meeting by the Reserve Bank of Australia (RBA), at 04:30 GMT. While the Aussie central bank is widely anticipated to not alter current interest rates, the recently upbeat comments from Governor Philip Lowe also defy the calls for any changes to the Quantitative Easing (QE). As a result, buyers may accelerate the run-up beyond 0.6800 in case of upbeat comments in the RBA Rate Statement.

Read: RBA Preview: Not enough to kick-start anything in AUD/USD at make-or-break levels

Technical analysis

Only if the pair closes below a 12-day-old support line, around 0.6620, on a daily chart, it can recall the sellers otherwise odds of its further upside to early-January lows near 0.6850 can’t be ruled out.