FxWirePro: AUD/USD spikes over 0.60% to retake 0.74 handle on RBA's hawkish tilt

AUD/USD chart - Trading View 

AUD/USD spiked higher on Tuesday to retake 0.74 handle after the RBA turned in hawkish and kept tapering on the table, despite growing coronavirus worries in Australia.

The Reserve Bank of Australia’s (RBA) left the official cash rate (OCR) at a record low of 0.10% at their August monetary policy meeting.

The central bank said that it will continue with tapering of bond-buying program after early September.

Australian bonds slipped following the RBA decision, pushing the yield on the 10-year government benchmark AU10Y 1.93% higher. 

AUD/USD was trading 0.63% higher on the day at 0.7404 at around 05:20 GMT, extending previous session's gains.

Risk appetite improves of late amid receding covid infections from Australia, however, growing tensions between Australia and China remain a negative factor, limiting run-away gains in the pair. 

In the recent development, China has accused Australia of vaccine shortage in Asia-pacific worsening the ties between the two largest trade partners.

On the data front, Job advertisements in Australia fell by 0.5% to 206,819 in July, the first drop in the last 14 months. While the Building Permits declined by 6.7% in June, a third straight month of fall.

Benchmark iron ore futures in China bounced back to rise more than 3% on Tuesday after five straight sessions of declines, fueled by speculations of relax in steel output controls.

Major Support Levels: 

S1: 0.7374 (5-DMA)

S2: 0.7308 (110-week EMA)

S3: 0.7227 (200-week MA)

Major Resistance Levels: 

R1: 0.7412 (21-EMA)

R2: 0.7442 (55-week EMA)

R3: 0.7547 (21-week EMA)

Summary: AUD/USD pivotal at 21-EMA resistance. Major trend is bearish. Death cross on the daily charts also keeps upside in check. Decisive break above 21-EMA could change near-term dynamics.