AUD/USD: Bears take a breather around 0.7350, RBA Minutes eyed
- AUD/USD retreats towards yearly low, sidelined of late.
- US officially alleges China over Microsoft Exchange hack.
- Victoria reports 13 new cases, local lockdowns to extend.
- PBOC rate decision, virus updates and RBA minutes to offer an active day.
Having refreshed the yearly low the previous day, AUD/USD sellers flirt with 0.7340, down 0.08% intraday, amid Tuesday’s Asian session. In doing so, the Aussie bears seem to wait for the minutes of the latest Reserve Bank of Australia (RBA) meeting and the People’s Bank of China (PBOC) rate decision while keeping reins amid the Delta covid variant concerns.
In the latest coronavirus (COVID-19) update, Australian Health Minister Greg Hunt tweeted that over one million doses of Pfizer vaccine will arrive in the nation. Also positive were comments from Aussie Epidemiologist Catherine Bennett who signaled, per the ABC News, that Victorian health authorities have the state's COVID-19 outbreak under control.
Even so, Victoria marks 13 new cases, including four from the previous day. Also, chatters that Australia’s local lockdowns will cost the country over $10 billion and dovish comments from Commonwealth Bank CEO, signaling further activity restrictions coming, exert additional downside pressure on the AUD/USD prices.
On the other hand, the US issued a “Level 4” travel alert for the UK over covid concerns.
In addition to the virus woes, the escalating US-China tussles also weigh on the AUD/USD prices. Recently, the White House report holds Beijing responsible for a cyber attack on Microsoft.
Amid these plays, S&P 500 Futures print 0.25% intraday gains to consolidate Wall Street’s losses whereas the US 10-year Treasury yields gain 2.3 basis points by the press time.
Looking forward, the RBA minutes will be the key as policymakers surprised markets by a dovish tone during the latest meeting. Should the policy doves keep controls, as per the minutes, AUD/USD may remain pressured. However, a surprise will have a larger reaction as the quote has already dropped heavily in recent days. Even so, the coronavirus woes and the Sino-American tussles may keep the Aussie prices under pressure. Additionally, the PBOC moves will also be observed closely after the recent RRR cut as market consensus back no change in the Loan Prime Rate (LPR).
Technical analysis
Tops marked during September and November 2020 offer immediate support to AUD/USD around 0.7340, a clear downside break of which will direct the bear to the October highs near 0.7245. Meanwhile, the 0.7400 threshold and July 09 lows near 0.7410 guard the pair’s short-term upside.