AUD/USD retraces recent gains ahead of RBA Governor Lowe’s speech
- AUD/USD fails to extend the latest recovery as investors await fresh clues from RBA’s Governor.
- Trade/Brexit optimism stays on the card.
- US economic numbers, qualitative catalysts will also entertain traders during the day.
With the Aussie buyers awaiting fresh clues from RBA Chief, AUD/USD shrugs off the trade/Brexit optimism while witnessing a pullback to 0.6835 during early Tuesday.
It’s worth pointing out that the lack of fresh data/event/news seems to have contributed to the pair’s latest pullback. Additionally, downbeat print of the weekly release of the ANZ-Roy Morgan Australian Consumer Confidence adds to the pair’s latest U-turn.
“Consumer confidence lost ground last week as concerns about the economic outlook trumped a more positive assessment of personal finances. Uncertainty around global trade is likely a factor. At the same time, accommodative monetary policy and tax cuts are fuelling better financial conditions. The drop in weekly inflation expectations comes after a period of stability and ahead of the release of the Q3 CPI. We expect that report to confirm that inflation pressures remain subdue,” says the Australia and New Zealand Banking Group’s (ANZ) Head of Australian Economics, David Plank.
Optimism surrounding the US-China trade deal have been lately bolstered by the United States’ (US) President Donald Trump’s comments and an announcement from the US Trade Representative’s (USTR) office signaling additional relief to Chinese exporters.
Also adding to the market optimism is the receding odds of a no-deal Brexit. Even if the United Kingdom’s (UK) Parliament has voted down Prime Minister Boris Johnson’s plea for a snap election on Monday, another vote on the same is likely to take place on Tuesday. With new amendments to the motion, increasing odds of its passage through the House of Commons also add to the market’s risk-on sentiment.
That said, the US 10-year treasury yields stay mostly unchanged around 1.85% while Asian stocks and remain mostly positive by the press time.
Given the speech by the Reserve Bank of Australia (RBA) Governor Philip Gove on the cards, investors pay little attention to anything else. However, the US housing and consumer confidence numbers, up for publishing during the later part of the day, will not be ignored while looking for fresh impulse.
Technical Analysis
In addition to a daily closing beyond 100-day Simple Moving Average (SMA) level of 0.6850 but the monthly high of 0.6885 and September month top near 0.6900 could also restrict pair’s near-term advances. Meanwhile, 0.6810/05 region comprising the latest lows and tops marked since September 20 will challenge sellers during pair’s further declines.