The Australian dollar displayed a round of supply and sent the market prices on a downward journey against its US rival and fell to an intraday low of US$0.7075 before rebounding.
One takeaway from the overnight’s sell-off was that the bulls staged a solid defence from the short-term uptrend at US$0.7085.
Today is the Reserve Bank of Australia (RBA) August monetary policy meeting.
It is widely expected the central bank will maintain the target for the official cash rate at a record low of 0.25%.
All the attention will yet again fall on the bank’s accompanying monetary policy statement as a dovish statement could trigger a decline to the Australian Dollar.
RBA Governor Philip Lowe is expected to reiterate the central bank’s determination to keep the cash rate at 0.25% for as long as possible until inflation starts rising and unemployment falls sharply.
However, Victoria’s stage-four lockdown will force the Reserve Bank to re-examine policy settings.
In economic data, China published the July Caixin Manufacturing PMI, which resulted in 52.8, beating the expected 51.3 and the previous 51.2. It is assessed further down challenges are to emerge with the critical support line located at US$0.7085.
A decisive break (New York close) should provide a measure move to US$0.6900-20, while the resistance is currently located from US$0.7155 minor with US$0.7195-05 viewed above.