- AUD/USD refreshes intraday low following weaker-than-expected Aussie data.
- Risk dwindles amid mixed updates concerning covid, vaccines.
- RBA is likely to keep the monetary policy intact, Rate Statement will be the key.
- US data, risk catalysts could offer additional direction.
AUD/USD drops to the fresh low of the day, down 0.20% intraday around 0.7745, following weak Australia trade numbers on early Tuesday. Mildly offered S&P 500 Futures should also have contributed to the Aussie pair’s recent weakness.
Australia’s headline Trade Balance for March dropped below 7529M prior and 8000M market consensus to 5574M. Details suggest that the Imports eased from 5.0% to 4.0% whereas Exports flashed -2.0% against -1.0% previous readouts in the latest update.
Read: Aussie Trade Balance: Misses estimates and AUD/USD is under modest pressure
Earlier in the day, Aussie weekly consumer sentiment improved from 112.4 to 112.7. However, sluggish market sentiment, portrayed by mild loss of S&P 500 Futures, seems to have weighed on the quote of late.
Behind the risk moves could be a request to tighten the coronavirus (COVID-19)-led activity restrictions by Japan’s largest prefecture (by area) Hokkaido. Also on the same side could be chatters that RBNZ Governor Adrian Orr is sick, fueling rumors of covid infection to the key Pacific central banker.
On the contrary, the US Federal Reserve (Fed) policymakers’ optimism over the economic recovery joins anticipated approval to the Pfizer-BioNTech covid vaccine for the age-group of 12-15 years age group by the US Food and Drug Administration (FDA) to battle the market bears.
It should, however, be noted that an absence of the Chinese and the Japanese traders restrict the market moves ahead of an important event of the day, namely monetary policy meeting by the Reserve Bank of Australia (RBA).
Although the RBA isn’t likely to alter the 0.10% benchmark rate, not to mention the bond purchase program, traders will analyze the Rate Statement for possible moves of tapering going forward.
Read: Reserve Bank of Australia Preview: On hold but a bit more optimistic
Other than the RBA-led moves, covid updates and US Factory Orders for March, expected +1.3% versus -0.8% prior, will also be important to watch for near-term AUD/USD direction.
Technical analysis
Sustained trading beyond 100-day SMA level of 0.7707 joins sustained trading beyond the 0.7690-95 horizontal support area, comprising lows marked in late February and April, as well as March 29 top, favor AUD/USD bulls to aim for 0.7820 level comprising April’s high.
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