Post-RBA Losses Extended

A stronger greenback pressured AUD/USD lower overnight with the pair extending post-RBA losses. AUD/USD dropped as low as 0.7575, last trades down 3 pips at 0.7389.

• The RBA decision worked against the previous bullish tone, pressing the rate through the 50-day EMA support. This works against the uptrend which had targeted 0.7503, Jul 13 high and remains a key near-term hurdle for bulls. Key support to watch is at 0.7222, Aug 27 low. A break would signal a reversal. Initial support is at 0.7337.
• CBA doesn't see a sustained impact from the RBA: "The RBA's decision to proceed with the taper of asset purchases, while extending purchases until 'at least mid‑February 2022', weighed on AUD. But we do not expect the dovish taper will have a sustained impact on AUD. AUD/USD has been dominated by the USD leg over the past month. The increasing likelihood that the FOMC will delay its taper will likely contain losses and provide some support to AUD/USD."
• A quiet economic docket on Wednesday, the Sydney evening will see RBA Deputy Governor Debelle speak at TradeTech FX 2021, although the nature of the event may limit the scope for monetary policy-related comments.