AUD/USD sticks to modest gains post-RBA

The AUD/USD pair failed to build on early up-move and retreated around 30-35 pips from session tops, albeit has managed to hold in positive territory post-RBA announcement. 

The pair continued with its struggled to move back above the key 0.80 psychological mark and retreated a bit after the RBA, on expected lines, maintained status quo, leaving its key benchmark interest rates at a record low level of 1.50%. 

The central bank maintained its neutral bias, reiterating the argument against a higher FX rate could result into a slower pick-up in economic activity and inflation than currently forecast. 

   •  RBA keeps policy steady, higher AUD weighing on outlook for output & employment

Meanwhile, the Australian Dollar remained underpinned by today's current account data showing net exports, as a percentage of GDP, bettered estimates and came-in at 0.30% for August, raising expectations from tomorrow’s Q2 GDP growth figures. 

Even today's better-than-expected Chinese non-manufacturing PMI, at 3-month high level of 52.7 for August as compared to previous month's reading of 51.5, further supported the China-proxy Australian Dollar and collaborated towards limiting further downside, at least for the time being.

Technical levels to watch

Immediate support is pegged near 0.7945-40 area, below which the pair is likely to head towards testing the 0.7900 handle before eventually dropping to its next support near the 0.7875-70 region.

On the upside, the 0.80 handle remains immediate strong hurdle, which if conquered is likely to accelerate the up-move towards August monthly high resistance near the 0.8040-45 region en-route 0.8065 level (26-month high touched late July).