AUD/USD’s rebound loses steam right below 0.7300
- Australian dollar's recovery from 0.7170 fails at 0.7295.
- The Aussie loses momentum after RBA's dovish statement.
- AUD/USD capped below important resistance at 0.7300/15.
The Australian dollar seems to have lost steam on Tuesday, as the pair’s recovery from last week's lows at 0.7170 has been rejected at 0.7295. The Aussie has failed at a relevant resistance level with the US dollar picking up after a three-day pullback.
A dovish RBA statement weighs on the AUD
The Aussie has lost momentum on Tuesday’s early trading, following the release of the Reserve Bank of Australia’s monetary policy statement. The Bank confirmed its commitment to maintaining its benchmark rate at 0.1% historical lows, practically discarding the possibility of any monetary tightening in the foreseeable future, which has undermined AUD strength.
The Australian dollar attempted to resume the upside path during the US trading session, to be capped at previous highs in the vicinity of 0.7300. A somewhat stronger US dollar, buoyed by higher US bond yields, with the benchmark 10-year note returning above the 1.5% level, is adding negative pressure to the pair.
On the macroeconomic front, US data has been mixed. The US trade balance has posted the largest deficit on record in September, with a $73.3 billion shortfall. On the other hand, the US ISM non-manufacturing PMI ticked up to 61.9 from 61.7 in the previous month, although the shortages on raw materials have increased prices and weighed on employment growth.
AUD/USD capped below previous highs at 0.7300/15 area
From a Technical perspective, daily and hourly charts show the AUD pointing upwards, with resistance at 0.7300/15 keeping a lid on the pair. Above here, the pair might find resistance at 0.7375 (September 13, 14 highs) and 0.7400 (September 10 high).
On the downside, the pair has found support at 0.7245 earlier today. Below here, a breach of 0.7165 (September 29 low) might increase bearish momentum and send the pair to retest 11-month lows at 0.7100 (August 20 low).
Technical levels to watch