AUD/USD is up for the key moves as not only the Reserve Bank of Australia’s (RBA) but the Aussie budget is also ready for publishing, respectively around 03:30 GMT and 08:30 GMT, on Tuesday. The Reserve Bank of Australia (RBA) held its cash rate and the targeted yield on 3-year bonds unchanged at 0.25% during the latest announcement.

The Aussie government is also to publish budget details and is largely expected to announce a take cut after already unveiling multi-billion Aussie dollars worth of infrastructure spending plan. Considering the current economic scenario of Australia, Westpac said, “The deficit has ballooned to a forecast -$240bn (12.5% of GDP) for 2020/21, from -$85.3bn for 2019/20 and a near-balanced budget in 2018/19. The reason of course is the COVID-19 pandemic, the ensuing severe recession, and the necessary policy response. The deficit is then expected to narrow to -$115bn in 2021/22 as the economy reopens and activity rebounds. Policy measures add an expected $179bn to the budget in 2020/21 and $73bn in 2021/22. This includes an expected October budget package of $45bn for this year and $66bn for 2021/22. The key budget strategy is to lift the economy to a higher growth path, enabling progress to be made in reducing the unemployment rate.”

Australia’s prudential regulator introduced on Tuesday a new supervisory system to strengthen its focus on non-financial risks for banks, insurers, and pension funds. The regulator updated its model for assessing risks due to the emergence and prominence of other prudential risks, such as failures of corporate governance, accountability, culture, remuneration, and cybersecurity, it said.

The new “risk and intensity” system will replace the “probability and impact of failure” models the Australian Prudential Regulation Authority (APRA) has used since 2002, it said in a letter to banks, insurers and funds.

Elsewhere, the US President Donald Trump’s risk tone did not support the greenback as market chatters that Trump isn’t well were the White House announcements ordering people to wear PPE kit while nearing Mr. President and also stating the 24-hour case for the Republican leader. Further, no schedules for Tuesday for the US President Trump also pushed market players to become cautious.

AUD/USD 4 Hour Chart:

Support: 0.7160 (S1), 0.7142 (S2), 0.7125 (S3).

Resistance: 0.7194 (R1), 0.7211 (R2), 0.7229 (R3).

Amid the optimism regarding the Aussie budget, we expect a bullish trend for AUD/USD.