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AUD/USD seeing two-way business for second day, PBOC rate cut unlikely

  • AUD/USD creating back-to-back doji candles on the daily chart - a sign of indecision or two-way business. 
  • The People's Bank of China (PBOC) is unlikely to cut rates in the near-term, according to the China Securities Journal. 

AUD/USD is currently trading largely unchanged on the day at 0.7178, having hit a high and low of 0.7198 and 0.7165, respectively, earlier today. 

Essentially, the pair is lacking a clear directional bias for the second day - the spot created a doji-like candle yesterday. 

The Aussie dollar had picked up a bid at 02:00 GMT on the back of upbeat Aussie jobs report. The pair, however, failed to hold on to gains above the 200-day moving average (MA) line, currently at 0.7194 and fell back to 0.7164. 

The pullback was somewhat surprising, given the 10-year yield jumped four basis points post-jobs data.  

That said, the selling pressure again weakened below the ascending 5-day MA, currently at 0.7175. The pair found bids below that average in the previous two trading days. 

The bears, however, may gain an upper hand during the day ahead with China’s securities journal ruling out a PBOC rate cut. That would put more pressure on the Reserve Bank of Australia (RBA) to cut rates to counter the economic slowdown. 

Technical Levels

 

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