FxWirePro: AUD/USD hits 2-year high above 0.74, Aussie bid ahead of RBA policy meeting

AUD/USD chart - Trading View 

AUD/USD was trading 0.41% higher on the day at 0.7406 at around 03:55 GMT, edging slightly lower from 2-year highs at 0.7413 hit earlier in the day.

The Australian dollar cheers the upbeat Australian Current Account and Chinese Caixin Manufacturing PMI. 

Data released earlier today showed China's Caixin Manufacturing PMI rose to 53.1 in August, surpassing the forecast of 52.6 and up from July's 52.8 reading.

Upbeat Caixin PMI follows a better-than-expected NBS manufacturing and non-manufacturing PMI reported on Monday, further reinforcing expectations for a faster recovery.

The Reserve Bank of Australia (RBA) policy decision in focus. The central bank is expected to keep interest rates unchanged at a record low of 0.25%. Focus on the statement for inflationary outlook of the economy and interest rates. 

A hawkish RBA could propel the pair higher. On the other side, if the RBA has a dovish view on the Australian economy, it could weigh down the major. 

Further, the Federal Reserve's recent decision to adopt a more relaxed approach to controlling inflation keeps the US dollar depressed and could support gains in the pair.

Technical studies are strongly bullish. Price action is consolidating break above 200W MA. Scope for test of 78.6% Fib at 0.7573. Failure to hold above 200W MA negates upside bias.