Higher Ahead Of RBA

With US markets away on Monday AUD/USD saw sideways trade, the pair has blipped higher at the start of the Asia-Pac session, up 12 pips at 0.7542.

• From a technical perspective despite Friday's recovery, the AUD/USD outlook remains bearish. Last week's break lower maintains the price sequence of lower lows and lower highs. Price is also below the 200-dma. The move in June through 0.7532, Apr 1 low confirmed a resumption of the reversal that occurred Feb 25 and this also highlights a bearish theme. The focus is on 0.7383, a bear channel base drawn off the Feb 25 high. Firm resistance is at 0.7617, the Jun 25 high.
• The latest RBA monetary policy decision and subsequent address from RBA Governor Lowe headline the local docket on Tuesday (see our full preview here).
• CBA says AUD could come under pressure post-RBA: "In our view, the AUD can drift lower in the absence of a substantial taper announcement. However, AUD could find some support if the RBA softens its forward guidance. There is a risk the RBA modifies the "2024 at the earliest" forward guidance on the cash rate to simply "2024." This change would indicate that the RBA's conviction that there will be no rate hikes until 2024 has softened."