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AUD/USD: awaits RBA's Statement on Monetary Policy, leaning bearishly

  • AUD/USD traders await the RBA's Statement on Monetary Policy.
  • AUD/USD leans with a bearish bias while below 0.7730.

AUD/USD was offered on the back of the US stocks falling and the Aussie dropped from 0.7694 to 0.7650 overnight. By the close, the Aussie was partly recovering to 0.7680 and, currently, AUD/USD is trading at 0.7680, down -0.01% on the day, having posted a daily high at 0.7684 and low at 0.7675. 

Forex today: stocks and DXY plummet on tax delay sentiment

US Senator Bill Cassidy, a Republican from Louisiana confirmed that the Senate Republicans had planned to propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019; the US dollar was down -0.31% atthat time ad then went onto making a session low of 94.41 from a high of 94.95 to settle at 94.51, -0.38%

Meanwhile,  the focus was on the Chinese inflation data in Asia yesterday and Australian Home Loans. The homes data dropped heavily by 2.3% in September vs the 3.0% advance expected. The Chinese inflation was upbeat and supportive rising by 0.1% MoM in October, and by 1.9% YoY. For today, we turn to RBA Statement on Monetary Policy.  There will be a new round of forecast projections and the Aussie's fate will be subject to revisions on the newly introduced mid-point range forecasts for 2018 and 2019. 

AUD/USD levels

  • Support levels: 0.7625 0.7590 0.7555.
  • Resistance levels: 0.7695 0.7730 0.7770.

Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart's price settled above a flat 20 SMA, while technical indicators aim marginally higher around their mid-lines, suggesting that this was not enough to confirm a new leg higher. "Something is more likely to happen on a bullish breakout of the 0.7730 region," Valeria added.

More broadly speaking the trend is still bearish while the price consolidates between 0.7625 and 0.7729 (2nd Nov high). If 0.7730 gives way, being the 5th Oct low and recent highs, the 21-D SMA located at 0.7746 comes into focus and if broken with daily closes in the higher end of the handle, the 100-D SMA is located at 0.7839. To the downside, the 2016-2017 uptrend line at 0.7472 is a key level.

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