AUD/USD re-attempts 0.7150 amid uptick in S&P 500 futures
- AUD bulls draw support from USD selling, rise in S&P 500 futures.
- AUD/USD could be limited by US-China tensions, virus woes.
- RBA sees a bumpy road to recovery due to regional lockdowns.
AUD/USD continues to face rejection at the 0.7150 mark for the second straight day, as the bulls await a strong catalyst for a convincing break above that level.
The aussie is looking to extend its bounce above 0.7150 on Tuesday, underpinned by the resurgent US dollar supply across the board and the uptick in the S&P 500 futures.
The USD sellers returned, in light of the US fiscal stimulus wrangling, coronavirus concerns and record low US 10-year real yields. Meanwhile, a stronger US Manufacturing data lifted the overall market sentiment, boosting the S&P 500 futures in sync with the European equities.
The buyers, however, face an uphill task due to the worsening virus situation in Australia and Reserve Bank of Australia’s (RBA) cautious outlook on the economy. Victoria declared a state of disaster and announced fresh lockdowns to contain the resurgence of infections.
The RBA kept its cash rate unchanged at a record low of 0.25%, at its monetary policy meeting held earlier today. But the central bank predicted that the economic recovery will likely be both ‘uneven’ and ‘bumpy’.
Looking ahead, the risk sentiment and dollar trades will continue to play out ahead of the US Factory Orders data and stimulus talks.
AUD/USD technical levels
The immediate upside will likely face stiff hurdle 0.7150 (5-DMA). The next resistance is aligned at 0.7161 (daily classic R1). On the flip side, the immediate support is seen at 0.7100 (round figure), below which the 20-DMA at 0.7077 could be tested.
AUD/USD additional levels