AUD/USD stays firmer below 0.7500 on China trade data, RBA eyed

AUD/USD seesaws near seven-week high after China trade numbers for August.

China Trade Balance improved, Imports–Exports also rose past consensus and prior.

Market sentiment remains firmer, USD weakness adds to the bullish bias.

RBA likely to push back plans of weekly bond purchase reductions.

AUD/USD picks up bids near 0.7450, up 0.11% intraday, after China reports strong trade numbers for August during early Tuesday. Also favoring the pair buyers is the cautious optimism in the market ahead of the Reserve Bank of Australia (RBA) monetary policy meeting.

China Trade Balance for August jumped past $51.05B to $58.34B, versus $56.59B prior. Details suggest the imports grew beyond 26.8% market consensus and 28.1% previous readout to 33.1% whereas Exports cross 17.1% forecast and 19.3% prior with 25.6% level.

Read: China’s August Trade Balance: Surplus, exports miss estimates amid imports blowout

In addition to the upbeat China data, cautiously optimistic market sentiment keeps AUD/USD buyers hopeful.

The return of the full markets underpins the AUD/USD bulls as traders still rejoice in Friday’s dismal prints of the US jobs report for August that weighed down Fed tapering chatters. Also on the same line were the increasing odds of continued easy money policies in Australia, Europe and the UK. However, the jump in the New Zealand 10-year bond yields to over two-year high amid hopes of the Reserve Bank of New Zealand (RBNZ) rate hike.

In addition to the central bank concerns, the recently easing virus numbers from Victoria and New South Wales, as well as from Japan and New Zealand, also favor the risk-on mood, which in turn help AUD/USD bulls due to the pair’s risk barometer status.

That said, the US 10-year Treasury yields begin the week’s trading on a firmer not around 1.34% whereas S&P 500 Futures rise 0.13% intraday to 4,540 at the latest.

Moving on, the RBA decision will be the key for AUD/USD traders as market players widely anticipate a brake to the tapering plans and hence any disappointment will be welcomed with stronger prices.

Read: Reserve Bank of Australia Preview: Focus on tapering and growth

Technical analysis

Unless crossing a four-month-old resistance line, near 0.7480, on a daily closing basis, AUD/USD traders keep their eyes on a fortnight long trend line support near 0.7410. Adding strength to the resistance is the confluence of 100-day and 200-day EMA around 0.7470-75.