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AUD/USD holds just above 0.7000 ahead of RBA decision
Traders are positioned for an RBA 25 bps hike on Tuesday, with the pair still capped by a firmer US dollar tied to rising expectations for another Fed move in October.
AUD/USD steadied just above the 0.7000 psychological level at the start of the week, trading near its lowest level since August 4 after touching that level on Friday, as many participants waited for the Reserve Bank of Australia meeting on Tuesday, according to FXStreet.
FXStreet said the RBA decision is expected to include a 25 basis point rate hike, and that investors will watch for further clues on the future policy path. The outlet also pointed to an extension of the US-China trade truce by two months as a tailwind for the China-proxy Australian dollar, while a bullish undertone in the US dollar, supported by higher bets for a Fed hike in October and elevated US bond yields amid oil-driven inflation fears, is capping the pair.
On the technical side, FXStreet noted that spot prices have been accepted below the 200-day simple moving average, even though 0.7007 is defending the 61.8% Fibonacci retracement. The outlet added that despite nearby supports, the pair has a bearish near-term bias, reinforced by momentum.