- AUD/USD remains firmer while paying a little heed to RBA’s no rate change decision.
- Risk-tone sentiment stays positive amid vaccine hopes, ignores stimulus updates.
- Early-day statistics from Australia, China join broad US dollar weakness to also please the bulls.
AUD/USD seesaws around 0.7405, intraday high of 0.7413, while heading into Tuesday’s European session. The aussie pair recently ignored RBA’s interest rate decision while carrying the earlier upside that probed 25-month the previous day.
The RBA said, “Accommodative approach will be maintained as long as it is required” during the latest policy statement while holding the benchmark rate near 0.25%.
Read: RBA holds key rate at a record low of 0.25%, AUD/USD keeps 0.7400
Market sentiment tracks the hopes of the US aid package, mainly triggered by comments from the American Treasury Secretary Steve Mnuchin. Also helping the mood could be the recently positive activity numbers from the US, China and Australia. Furthermore, receding coronavirus (COVID-19) numbers and chatters surrounding the vaccine adds to the risk-on mood when the Fed is ready to pump the economy as long as it's possible.
While portraying the trading sentiment, the US 10-year treasury yields gain two basis points to 0.715% whereas the S&P 500 Futures bounce back towards challenging the record high of 3,524.50 marked the previous day.
Talking about the data, Australia’s Current Account Balance for the second quarter (Q2) joined August month’s Building Permits to challenge the downbeat Aussie PMIs flashed by the AiG and Commonwealth Bank (CBA). While the AiG’s gauge of manufacturing activity slumped below 50, it’s counterpart from the CBA defied 53.9 forecast and prior for August. Further, the Aussie Current Account surged past-13B expected to 17.7B. Furthermore, China’s Caixin Manufacturing PMI crosses 52.6 forecast and 52.8 prior to 53.1 in August.
Having witnessed the initial reaction to the plethora of Aussie-related data and events, the AUD/USD pair traders may catch a breather while taking clues from the US dollar moves ahead of the US session. In doing so, the bulls may await any miss by the ISM Manufacturing PMI from 54.5 forecast to firm-up the grip beyond the 0.7400 threshold.
Technical analysis
Failures to extend the run-up beyond 0.7400 favor the odds of the pair’s pullback to January 2019 top surrounding 0.7300 amid overbought RSI conditions. Alternatively, bulls need sustained trading above 0.7416, the previous day’s high, to aim for the August 2018 high near 0.7455 and July 2018 peak close to 0.7485.
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