- AUD/USD gained follow-through traction for the second consecutive session on Tuesday.
- The aussie got a boost after the RBA stuck with its plan to taper the bond-buying program.
- A subdued USD demand remained supportive of the uptick, though lacked bullish conviction.
The AUD/USD pair maintained its bid tone through the first half of the European session, albeit has retreated around 25 pips from daily swing highs. The pair was last seen trading just below the 0.7400 mark, still up over 0.35% for the day.
Following a brief consolidation during the early part of the trading action on Tuesday, the AUD/USD pair caught some fresh bids after the Reserve Bank of Australia (RBA) announced its policy decision. Despite concerns about the economic impact of rising coronavirus cases, the RBA stuck with its plan to taper its bond-buying programme and provided a goodish lift to the Australian dollar.
Apart from this, a softer tone surrounding the US dollar further acted as a tailwind for the AUD/USD pair for the second consecutive session. In fact, the key USD Index languished near one-month lows amid expectations that the Fed will retain its ultra-lose monetary policy stance for a longer period. This, along with the risk-on impulse in the markets, undermined the safe-haven greenback.
However, a goodish rebound in the US Treasury bond yields helped limit any deeper losses for the USD. This, in turn, kept a lid on any further gains for the AUD/USD pair, which, so far, has been struggling to capitalize on its move beyond the 0.7400 mark. Hence, it will be prudent to wait for some follow-through buying before positioning for any further appreciating move.
There isn't any major market-moving economic data due for release from the US on Tuesday, leaving the USD at the mercy of the US bond yields. Traders might further take cues from the broader market risk sentiment, which will influence the perceived riskier aussie and produce some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD regains 1.2350 ahead of UK PMIs
GBP/USD is recovering ground above 1.2350 in the European session, as the US Dollar comes under fresh selling pressure on improving risk sentiment. The further upside in the pair could be capped, as traders await the UK PMI reports for fresh trading impetus.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.