AUD/USD: trapped between levels, technically neutral, fundamentally bearish?

  • AUD/USD: RBA minutes leaning slightly hawkish and AUD/USD supported.
  • AUD/USD trapped between familiar key break out points.

AUD/USD is contained in a narrow range within the daily descending channel on Tuesday in NY after rising to 0.7791 in early Europe selling of the greenback and just two pips shy of 100-D SMA. Currently, AUD/USD is trading at 0.7766, down -0.19% on the day, having posted a daily high at 0.7793 and low at 0.7760.

AUD/USD was helped along yesterday on a weaker dollar, however, the DXY has bounced back on Tuesday, +0.23% at 89.6290 at the time of writing, (range 89.229 - 89.666 so far). There is support coming in from copper that has picked up in recent trade, up to test the 100 and 21-hr smas in a correction of yesterday's sell-off and gold is also catching a bid despite a strong performance on Wall Street. However, AUD/JPY lags risk and the yen has been carving out a case for territory below the 107 handle. 

Aussie fundamentals, RBA leans hawkish but market not convinced

RBA minutes: Gradual approach to policy - Westpac

From a fundamental perspective, the RBA minutes are supportive of a higher Aussie on the basis that the board leans with a hawkish bias, ( RBA said next move in rates was likely a hike), although there is a lack of conviction here and risks to such an outlook continue to accumulate.  The Chinese data is a weight. GDP was around expectations at +6.8% and there was a little reaction but IP was a bit worse than expected, evened out by better retail sales. 

AUD/USD levels

AUD/USD rallied up to and through the 100-D SMA on 12th April and was rejected ahead of the 200-D SMA, while contained by the resistance of the descending channel from 15th Feb highs of 0.7988 and has since been bouncing off 0.7750 support area for repeated failures around the 100-D SMA. Still changing hands above 10 & 21-D SMAs, the pair needs a break through the 100-D/200-D SMAs, (cloud top). On a flip, a daily close below 76.4 Fibo at 0.7651 (200-W SMA) and 0.7643 could set off a test of the 0.75 handle. 0.7504 could be the last defence to 0.7420.  
 

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