AUD/USD loses momentum before reaching 0.7400, focus shifts to RBA

AUD/USD touched a daily high of 0.7372 on Monday.
US Dollar Index stays flat on the day above 92.00.
RBA is expected to keep its policy rate unchanged.

Eren Sengezer FXStreet

The AUD/USD pair preserved its bullish momentum in the early American session and touched a daily high of 0.7382. However, the pair failed to push higher and was last seen gaining 0.28% on the day at 0.7365.

The upbeat market mood at the start of the week helped the AUD find demand. With Wall Street's main indexes opening in the positive territory following Friday's slide, AUD/USD managed to edge higher in the second half of the day.

Nevertheless, the greenback stays resilient against its rivals and keeps AUD/USD's upside limited. The US Dollar Index is currently unchanged on the day at 92.07.

Earlier in the day, the data from the US showed that the business activity in the US manufacturing sector continued to expand at a robust pace in July. The IHS Markit Manufacturing PMI and the ISM's Manufacturing PMI arrived at 63.4 and 59.5, respectively. The Prices Paid component of the ISM's survey edged lower to 85.7 from 92.1 in June, suggesting that input price pressures softened modestly.

Eyes on RBA's policy announcements

On Tuesday, the Reserve Bank of Australia (RBA) is expected to keep its policy rate unchanged at 0.1%. In its latest policy meeting, the RBA announced that it will reduce the pace of asset purchases to A$4 billion from A$5 billion and experts think that the bank could opt out to delay that adjustment given the uncertainty caused by the rising cases of Delta variant.

Previewing the event, "market players are anticipating a dovish stance that should put the AUD under selling pressure," said FXStreet Chief Analyst Valeria Bednarik. "From a technical point of view, the AUD/USD pair is bearish. In the daily chart, the pair is developing below a bearish 20 SMA, which extends its decline below the longer ones, providing dynamic resistance at around 0.7405."

Reserve Bank of Australia Preview: Dovish twist as lockdowns continue.

Technical levels to watch for

AUD/USD

Overview
Today last price	0.7366
Today Daily Change	0.0021
Today Daily Change %	0.29
Today daily open	0.7345

Trends
Daily SMA20	0.7415
Daily SMA50	0.7556
Daily SMA100	0.7635
Daily SMA200	0.7599

Levels
Previous Daily High	0.7405
Previous Daily Low	0.733
Previous Weekly High	0.7415
Previous Weekly Low	0.7317
Previous Monthly High	0.7599
Previous Monthly Low	0.7288
Daily Fibonacci 38.2%	0.7359
Daily Fibonacci 61.8%	0.7376
Daily Pivot Point S1	0.7315
Daily Pivot Point S2	0.7285
Daily Pivot Point S3	0.724
Daily Pivot Point R1	0.739
Daily Pivot Point R2	0.7435
Daily Pivot Point R3	0.7465

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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