RBA Minutes Retain Dovish Tilt, AUD/USD Higher In Asia

AUD/USD extending its mild move higher in early Asia, the pair last up 10 pips at 0.7544 after being as high as 0.7578 during the U.S session.

• RBA minutes were mostly as expected by markets. The board said it would keep bond purchase programme unchanged but is prepared to do more if necessary. It also noted that the recovery would take time, and be uneven, and that it is cognisant of risks from tensions with China.
• The board also noted that there is still a significant amount of spare capacity in the economy and the labour market.
• Gains in the pair have been tempered after reports that China intended to enforce a ban on coal imports from Australia, and that the iron ore market was also under scrutiny. Iron ore prices remain supported, futures in Singapore still over $150 and up around 1% on the session after dropping sharply yesterday.
• From a technical perspective the pair has a bullish outlook with further gains likely. The Dec 2 break of 0.7414, Sep 1 high and former key resistance confirmed a resumption of the uptrend that began Mar 19. Moving average studies are also in a bull mode reinforcing current conditions. The focus is on 0.7583, the Jun 14, 2018 high and 0.7638, a Fibonacci retracement. Key short-term support is at 0.7373, Dec 7 low