AUD/USD continues to consolidate near 0.7750
The AUD/USD dropped at Monday's start, but the pair has clawed its way back and is currently holding just above the 0.7750 level.
The Aussie is kicking off a new week of trading with a slip deeper into Friday's consolidation as markets come to grips with US President Donald Trump's announcements of hefty tariffs on primary materials, specifically steel and aluminum. With Australia's economy dependant on metals, Trump's tariff announcement comes at a time when the AUD is already expected to decline through 2018 and 2019. Australia is taking the day off for Labour Day, but traders are already positioning themselves ahead of the Reserve Bank of Australia's (RBA) rate statement later today.
The RBA is expected to remain on hold, and the central bank will be releasing their latest Rate Statement on Tuesday at 03:30 GMT, to be followed later by a speech from the RBA's governor Philip Lowe at 21:30, followed closely by Australia's GDP figures at 00:30 Wednesday. With growth for the Australian economy almost in idle, The RBA finds itself in the unenviable position of being unable to raise rates as a lack of inflation continues to plague the economy. Unsustainable levels of household debt and a lopsided real estate market are among the RBA's central culprits for lack of sustainable growth moving forward, and the central bank is widely anticipated to stand pat on interest rates through 2018 and possibly 2019 as well.
The pair is now trading just beneath the 200-day SMA, and bearish pressure remains high, although pattern traders will note the hammer candlestick last week on the Daily charts representing a possible bounce to come; H4 candles show the Aussie continues to slide against the US Dollar in short bursts of selling, and a potential bottom has yet to price in. Intraday support currently sits at 0.7737 and 0.7712, with resistance at 0.7780 and 0.7830.