Aussie falls after RBA Governor Philip Lowe’s speech during the early Monday. Although RBA’s Lowe tried to sell the Aussie government’s policies, his comments over inflation and employment seem to have weighed on the AUD.

The Reserve Bank of Australia’s governor Philip Lowe said on Monday that the central bank is doing what it can to support the country’s economic recovery from the coronavirus pandemic and will maintain policy settings until it meets its employment and inflation goals. He said that “The result has been a quicker and stronger economic recovery than was expected. This, however, does not hide the fact that we still have a long way to go.”

“The challenges facing all are large,” Lowe said in the speech in Melbourne. “At the Reserve Bank, we are seeking to support the economic recovery and a stronger labour market that is consistent with achieving the inflation target.”

Adding the pressure on the Aussie, Australian shares fell on Monday, hurt by losses among mining and technology stocks, Investors are now waiting for the release of minutes from the central bank’s monetary policy which will be done by Tuesday.

On the other hand, Upbeat data of china comes in, China’s Retail Sales crosses 32.0% forecasts and 4.6% prior with 33.8% YoY figures for January. Further details suggest that Industrial Production also rallied in January from 7.3% prior and 3.3% expected to 35.1% YoY.

The U.S. dollar held firm on Monday after bouncing off a one-week low last week, supported by a spike in benchmark Treasury yields to more-than-one-year highs as inflation fears continued to smoulder.

U.S. producer prices had their largest annual gain in nearly 2-1/2 years, data showed on Friday, while the country’s economy is set to get a massive shot in the arm from President Joe Biden’s $1.9 trillion stimulus package. The outlook for the already brisk pace of U.S. vaccinations has also been boosted by Biden’s order for every state to make all adults eligible for vaccination by May 1.

AUD/USD 4 Hour Chart:

Support: 0.7721 (S1), 0.7685 (S2), 0.7645 (S3)

Resistance: 0.7798 (R1), 0.7838 (R2), 0.7874 (R3).

Upbeat Chinese data can support Aussie but US dollar strength and US Treasury yields puts pressure on the Aussie. We expect a bearish trend for AUD/USD.