AUD/USD finds bids sub-0.7900, RBA minutes, firmer DXY still weigh

• Clings to key support near 0.7890.    
• USD firmer in thin markets.
• RBA talks down AUD strength.

Fresh bids emerged once again near the 0.7890 support area, allowing a tepid bounce in the AUD/USD pair back above the 0.79 handle, as markets assess the minutes of RBA’s January February meeting.

AUD/USD: Focus shifts to Aus construction and wages data

The spot came under fresh selling pressure last hour and fell back below the 0.79 handle, in a delayed reaction to the RBA’s Feb monetary policy meeting minutes, which reiterated that a rising AUD would impede pick-up in economic growth, inflation while adding that Low rates helping reduce unemployment, lift inflation. These RBA headlines suggested that the Australian central bank could very well remain in a wait-and-see mode in the near-term before future rate hikes.

Moreover, a fresh bout of the USD buying across the board, helped by rising Treasury yields, also knocked-off the major in a bid to test the key support. However, the bulls held on to the technical support, now pushing the rates above the 0.7900 levels.

The pair is likely to get influenced by the USD dynamics and risk trends amid holiday-thinned light trading and a lack of fresh fundamental catalysts until the release of the Australian construction work done and wage price index data due out tomorrow.

AUD/USD levels to watch

Valeria Bednarik, Chief Analyst at FXStreet notes, “Technically, the pair bounced again on an approach to the 0.7890 level, a major Fibonacci support, as the level stands for the 38.2% retracement of the December/January rally, keeping the downside limited as long as the pair remains above it. The lack of volatility has left the intraday picture neutral, as the pair is below a bullish 20 SMA, while technical indicators hover around their mid-lines with limited directional strength. Support levels: 0.7890 0.7850 0.7810. Resistance levels: 0.7930 0.7965 0.8000.”