AUD/USD holds onto recovery gains above 0.6050, RBA eyed

AUD/USD stays within the two-hour-old 0.6080-6100 range, currently around 0.6090, while stepping forward for Tuesday’s Asian session. In doing so, the pair holds onto Monday’s recovery gains, mainly due to slightly positive coronavirus (COVID-19) data from Europe, ahead of the key RBA meeting.

Be it Spain’s fourth straight slowdown in the pace of new deaths or lowest daily increase in Italy’s confirmed cases in three weeks, everything has contributed to the recovery in the market’s risk-sentiment on Monday. Comments from New York Governor Andrew Cuomo, stating that deaths there were showing signs of hitting a plateau, also favored the optimism.

While portraying the risk, the US 10-year Treasury yields gained nine basis points to 0.68% whereas Wall Street close signaled 7.0% rally by the benchmarks at the end of Monday’s trading session.

Considering the data, TD Securities Inflation report for March suggested an increase of 0.2% MoM, better than the previous -0.1%, coupled with a 1.5% YoY rise versus 1.6% prior.

Although the Reserve Bank of Australia (RBA) meeting will be the key catalyst for the Aussie, February monthly trade numbers will also second-tier employment data from the Australia and New Zealand Banking Group (ANZ) could offer intermediate directions.

Alike all other employment data, Aussie ANZ Job Advertisements could contract 2.9% versus +0.7% prior while Trade Balance earlier flashed 5,210M figures. Further, the RBA is expected to hold the present monetary policy unchanged and hence the underlying tone of policymakers in the statement will be important to watch.

Technical analysis

Unless successfully crossing monthly trend line resistance, currently at 0.6100, any recovery seems doubtful. On the contrary, fresh selling below the recent low near 0.5980 can’t be ruled out.