AUD/USD pulls away from daily highs, steadies around 0.7350 ahead of Powell's testimony

AUD/USD trades in a tight range after Monday's decline.
RBA left its monetary policy unchanged as expected.
Risk-positive market environment continues to weigh on USD.

Eren Sengezer FXStreet

The AUD/USD pair lost 50 pips on Monday and struggled to stage a meaningful rebound on Tuesday. As of writing, the pair was up 0.08% on the day at 0.7350.

RBA fails to trigger a market reaction

At its December monetary policy meeting, the Reserve Bank of Australia (RBA) decided to keep its policy rate unchanged at 0.1% as expected. In its policy statement, the RBA noted that it does not expect to hike the policy rate at least for three years and added that it will keep the size of bond purchases under review. Nevertheless, the AUD showed no immediate reaction to the RBA's announcements.

Meanwhile, the data from Australia revealed that the business activity in the manufacturing sector continued to expand at a robust pace in November with the Commonwealth Bank Manufacturing PMI arriving at 55.8%.

On the other hand, the risk-positive market environment is forcing the safe-haven greenback to remain on the back foot and allows AUD/USD to sit comfortably above 0.7300. At the moment, the US Dollar Index is down 0.08% on the day at 91.80 and the S&P 500 looks to start the day decisively higher.

In the second half of the day, FOMC Chairman Jerome Powell will be testifying before Congress. Additionally, the IHS Markit and the ISM will be releasing the Manufacturing PMI data for November.

Technical levels to watch for

AUD/USD

Overview
Today last price	0.7352
Today Daily Change	0.0013
Today Daily Change %	0.18
Today daily open	0.7339

Trends
Daily SMA20	0.7291
Daily SMA50	0.7186
Daily SMA100	0.7191
Daily SMA200	0.6861

Levels
Previous Daily High	0.7438
Previous Daily Low	0.7338
Previous Weekly High	0.7399
Previous Weekly Low	0.7264
Previous Monthly High	0.7438
Previous Monthly Low	0.699
Daily Fibonacci 38.2%	0.7376
Daily Fibonacci 61.8%	0.74
Daily Pivot Point S1	0.7306
Daily Pivot Point S2	0.7273
Daily Pivot Point S3	0.7207
Daily Pivot Point R1	0.7405
Daily Pivot Point R2	0.7471
Daily Pivot Point R3	0.7504

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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