AUD/USD seesaws around 0.7150 on cautious RBA SoMP, firmer yields, focus on US NFP
- AUD/USD pays a little heed to quarterly RBA statement, dribbles around weekly top.
- RBA SoMP said that the board is prepared to be patient, cited uncertainties surrounding inflation outlook.
- Yields stay firmer, stock futures rise amid escalating geopolitical concerns and pre-NFP lull.
AUD/USD flirts with daily tops surrounding 0.7150 following the Reserve Bank of Australia’s (RBA) quarterly Statement of Monetary Policy (SoMP). The Aussie pair refreshed weekly top the previous day before reversing from 0.7168 but is gaining 0.20% intraday by the press time of Friday’s Asian session.
RBA SoMP repeated the recent communication from Australia’s central bank, firstly via Rate Statement and then by Governor Philip Lowe, while rejecting the need for immediate rate hikes even as the inflation figures are strong. “We will not raise interest rates until inflation is consistently in the target range,” said the bank per the statement.
Read: RBA SoMP: RBA is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve
It’s worth noting that mixed concern in the market and pre-NFP caution also challenges the AUD/USD traders of late, following the volatile day due to the central bank actions and mixed US data.
On the positive side are the recently easing Aussie covid numbers and South Australia’s (SA) easing of activity restrictions. Also helping the AUD/USD prices could be the downbeat performance of the US Dollar Index (DXY) and around 1.0% daily gain of the S&P 500 Futures.
Alternatively, firmer US Treasury yields and geopolitical concerns surrounding Russia-Ukraine, as well as global inflation fears, seem to challenge the AUD/USD buyers.
Moving on, the Aussie pair traders may witness a lackluster day ahead of the US jobs report for January as markets turn cautious due to the negative surprise from US ADP Employment Change for January, to -301K versus +207K forecast.
Read: Nonfarm Payrolls Preview: Win-win-win for the dollar? Low expectations, weak greenback point higher
Technical analysis
AUD/USD battles a fortnight-old resistance line near 0.7150 amid receding bullish bias of MACD, suggesting further grinds 50-SMA and 200-SMA on the four-hour (4H) chart, respectively around 0.7095 and 0.7185.