AUD / USD loses momentum before hitting 0.7400, focus shifts to RBA

• AUD / USD touched a daily high of 0.7372 on Monday.
• The US dollar index remains flat on the day above 92.00.
• RBA is expected to keep its policy rate unchanged.

AUD / USD maintained its bullish momentum early in the American session and hit a daily high of 0.7382. However, the pair failed to rise and was last seen gaining 0.28% on the day at 0.7365.

The bullish market mood at the beginning of the week helped the AUD find demand. With the major Wall Street indices opening in positive territory after Friday’s slide, the AUD / UDD managed to close higher in the second half of the day.

However, the dollar remains resilient against its rivals and keeps the positive side of AUD / USD limited. The US Dollar Index is unchanged on the day at 92.07.

Earlier in the day, US data showed that business activity in the US manufacturing sector continued to expand at a robust pace in July. The IHS Markit Manufacturing PMI and the ISM Manufacturing PMI came in at 63.4 and 59.5, respectively. The Prices Paid component of the ISM survey fell to 85.7 from 92.1 in June, suggesting that pressures on input prices eased modestly.

All eyes on RBA politics

On Tuesday, the Reserve Bank of Australia (RBA) is expected to keep its monetary policy rate unchanged at 0.1%. At its latest policy meeting, the RBA announced that it will reduce the pace of asset purchases to $ 4 billion from $ 5 billion, and experts believe the bank could choose to delay that adjustment given the uncertainty caused by the increase in assets. Delta variant cases.

Previewing the event, “market players are anticipating a dovish stance that should put the AUD under selling pressure,” said valeria Bednarik, chief analyst at FXStreet. “From a technical point of view, the AUD / USD pair is bearish. On the daily chart, the pair is developing below a bearish 20 SMA that extends its decline below the longer ones, providing dynamic resistance around of 0.7405. “

Technical levels