Aussie traded low against the greenback today as a reaction to the Reserve Bank of Australia (RBA) monetary policy announcement on early Tuesday. At their October monetary policy meeting, the Reserve Bank of Australia (RBA) board members decided to keep the official cash rate (OCR) unchanged at a record low of 0.10%.The board has decided to maintain the target of 10 basis points for the April 2024 Australian government bond and the board also made a decision to continue to purchase government securities at the rate of $4 billion a week until at least mid-February 2022.

The previous day, Australia’s trade reserves showed improvement in August but imports and exports had declined in the particular month. Figures from the Australian Bureau of Statistics out on Tuesday showed the surplus on international trade jumped to A$15.1 billion ($11.0 billion) in August, from A$12.7 billion the month before. That was the highest on record and confounded analysts’ forecasts of a drop to A$10.3 billion. Exports climbed 4.1% in the month to A$48.5 billion led by LNG, hard coking coal and thermal coal, courtesy of strong energy demand in Asia. Both prices and volumes were higher, eclipsing a sharp fall in prices for iron ore, Australia’s number one export earner.

Imports were down 1.5% to $ 33.4 billion in August, mainly on the back of a fall in capital goods and higher imports of cars. The trade in services is halfway through the pre-pandemic stages, with Australia’s international borders still closed to tourists and students. ABS said it would stop reporting statistics from January, while looking for ways to improve statistics due to problems with obtaining reliable data on services. The downside was ANZ job advertising for September, which was lower than the previous and market forecast -2.7%. Aside from the RBA’s cautious optimism and mixed data previously released in Asia, the AUD/USD market is likely to be depressed due to the risk of sluggish pressure.

Meanwhile, Australia is increasing its vaccination rates, with Sydney and Melbourne, its largest cities and the capital Canberra enduring a week-long lockdown against the highly contagious delta variant. The national first-dose rate for adults exceeded 80% on Tuesday morning. AUD/USD traders will follow short-term direction for the above risk catalysts. Amidst this, China and US politics should be the focus. In addition, the final reading of the US ISM Manufacturing PMI and the Markit PMI for September is important to watch for further moment.

AUD/USD 4 Hour Chart:

Support: 0.7257 (S1), 0.7228 (S2), 0.7205 (S3).

Resistance: 0.7310 (R1), 0.7332 (R2), 0.7362 (R3).

All the above catalysts puts the Aussie in downtrend, ahead of RBA interest rate decision and declining in exports and imports. We expect a bearish trend for AUD/USD.