The Australian Dollar drifts higher in Tuesday’s Asian session.
China's Caixin Manufacturing PMI rose to 51.2 in March vs. 51.1 expected.
Traders will closely watch the RBA rate decision on Tuesday.
The Australian Dollar (AUD) gains traction on Tuesday, bolstered by the upbeat Chinese economic data. The latest data released on Tuesday showed that China’s Caixin Manufacturing PMI improved to 51.2 in March from 50.8 in February. This reading was better than the expectation of 51.1. Nonetheless, the upside for the pair might be limited amid global trade uncertainties. The markets might turn cautious ahead of reciprocal tariffs from US President Donald Trump on Wednesday, which could undermine the Aussie.
All eyes will be on the Reserve Bank of Australia (RBA) interest rate decision on Tuesday. The RBA is anticipated to keep interest rates unchanged at the April meeting as it waits out an election campaign fought on cost-of-living issues and girds for the economic impact of a US-driven upheaval in global trade. RBA Governor Michele Bullock’s press conference will follow at 04:30 GMT. On the US front, the ISM Manufacturing Purchasing Managers' Index (PMI) for March will be in the spotlight.
Australian Dollar edges higher ahead of RBA rate decision
China’s NBS Manufacturing PMI rose to 50.5 in March versus 50.2 prior, in line with the market consensus. Meanwhile, the NBS Non-Manufacturing PMI climbed to 50.8 in March from 50.4 in February and was stronger than the estimation of 50.5.
Trump stated late Monday that his reciprocal tariffs plan will target all other countries when they are unveiled Wednesday. He denied that the additional tariffs will target just the top ten or 15 trade partners that have their own import duties on US goods.
Australia’s Retail Sales rose 0.2% MoM in February, compared to a rise of 0.3% in January, according to the Australian Bureau of Statistics (ABS) on Tuesday. The reading came in below the market expectations of 0.3%.
Economists surveyed by Bloomberg expect the Australian central bank will stand pat at 4.1% and stick with a cautious stance after easing for the first time in four years last month.
Australian Dollar maintains a bearish lean within a symmetrical triangle
AUD/USD trades firmer on the day. The pair trades within the symmetrical triangle pattern on the daily timeframe. The negative outlook of AUD/USD remains in play, with the price holding below the key 100-day Exponential Moving Average (EMA). The downward momentum is supported by the 14-day Relative Strength Index (RSI), which stands below the midline near 41.50, supporting the sellers in the near term.
The lower limit of the triangle pattern at 0.6225 acts as an initial support level for the pair. Extended losses could see a drop to 0.6186, the low of March 4. Further south, the next contention level is located at 0.6130, the low of January 13.
On the flip side, the first barrier for AUD/USD is seen at 0.6330, the high of March 26. The next hurdle to watch is 0.6352, the 100-day EMA. A decisive break above this level could see a rally to 0.6370, the upper boundary of the symmetrical triangle pattern.
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