AUD/USD: Takes offers towards 0.7700 on mixed RBA minutes, Aussie House Price Index

• AUD/USD remains heavy as sellers attack intraday low on key data/events of the day.
• RBA minutes repeat commitment to three-year yield target, Q4 House Price Index grew past-2.0% on QoQ, eased on YoY.
• Risk dwindles amid receding vaccine optimism, geopolitical fears.
• US Retail Sales can entertain sellers ahead of the Fed, risk headlines also become important to follow.

AUD/USD drops to 0.7741, down 0.15% intraday, as bears attack the day’s low of 0.7740 during early Tuesday. The pair’s latest weakness could be traced from mostly downbeat RBA minutes and Aussie housing data while sluggish market sentiment exerts additional downside pressure on the quote.

Minutes of March month’s RBA meeting suggest that the Australian monetary policy authorities are concerned over the economy’s employment sector and are determined to keep the easy money policy. However, the minutes also ruled out negative rates while also suggesting no rate hike unless inflation and employment targets are met. Above all, the statement like, “‘very significant’ monetary support to be needed for some time” seems to weigh on the AUD/USD.

Also pleasing to the AUD/USD sellers could be Australia’s House Price Index (Q4) data that lagged behind the previous 4.5% on YoY but crossed the 2.0% market consensus on QoQ.

Read: RBA Minutes Of March Policy Meeting: Would look through “transitory fluctuations” in inflation

Market sentiment stays sluggish even as the US 10-year Treasury yield extends the previous day’s weakness around 1.60%. The reason could be traced from fresh concerns over AstraZeneca’s vaccines after European majors suspend the British-Swedish vaccine over blood clotting issues. Even so, US President Joe Biden’s promise to deliver 100 million jabs in the next 10 days seems to favor the mood.

Elsewhere, North Korea warns the US over stronger ties with South Korea and military drills near the hermit kingdom while American Secretary of State Antony Blinken is on an Asian trip. Also on the risk-negative side could be the POLITICO piece saying, “Top U.S. military officials are warning with increasing urgency that China could in the next few years invade Taiwan, the island nation whose disputed political status has long been a fraught subject of U.S.-China relations.”

Amid these plays, S&P 500 Futures print mild losses even as the Wall Street benchmark refreshed record top on Monday. Though, Australia’s ASX 200 gains 0.20% by the press time amid mildly positive data/events.

Although US Retail Sales for February, expected -0.5% versus +5.3% MoM prior, will decorate the calendar on Tuesday, major attention will be given to Wednesday’s Fed meeting where the policymakers will react to the latest $1.9 trillion covid relief plan. Should the FOMC members revise up their dot-plot forecasts, fears of reflation could gain momentum and weigh on AUD/USD prices.

Also read: US Retail Sales February Preview: Will the real consumer please stand up?

Technical analysis

50-day SMA level of 0.7740 offers immediate support during the quote’s further downside. However, Monday’s Doji candlestick favors AUD/USD buyers to eye the 0.7800 threshold, while also looking at January tops near 0.7820 afterward.