- The PBoC’s latest rate cut failed to provide any impetus to the aussie.
- The USD remained well supported by concerns over coronavirus crisis.
- The set-up warrants some caution before placing fresh directional bets.
The AUD/USD pair lacked any firm direction and remained confined in a narrow trading band, around mid-0.6300s through the Asian session.
The pair failed to capitalize on last week’s late bounce from near one-week lows and was seen oscillating in a narrow trading band as investors preferred to wait for a fresh catalyst before placing any aggressive directional bets.
The PBoC’s latest move to reduce the one-year loan prime rate to 3.85 from 4.05% and the five-year rate to 4.65% from 4.75% did little to provide any meaningful boost to the China-proxy or assist the pair to gain any traction.
On the other hand, the US dollar managed to regain some positive traction and remained well supported by its status as the global reserve currency amid persistent concerns over the economic fallout from the coronavirus pandemic.
This coupled with a slight deterioration in the global risk sentiment, as depicted by a negative trading mood around equity markets, further undermined perceived riskier currencies, like the aussie, and kept a lid on any move up for the pair.
The pair was seen hovering around the 50-day SMA pivotal point, making it prudent to wait for a sustained move in either direction before positioning for any meaningful intraday momentum amid absent relevant market-moving economic releases.
Technical levels to watch