AUD/USD at day lows, RBA main focus

AUD/USD has come under pressure in early Tokyo, last exchanging hands at 0.7522 after printing a session low of 0.7516, which follows a weekly high of 0.7544. Focus is now on the RBA monetary policy decision at 4.30GMT, but first as a starter, Australia will also release retail sales and trade balance data, due at 1.30GMT.

As Matias Salord, Analyst and News Editor at FXStreet, notes: "On Tuesday, the Reserve Bank of Australia (RBA) will decide on monetary policy. Market consensus points to the central bank leaving rates unchanged at 1.75% and the main risk is a rate cut that would weaken the Aussie in the market."

Technical outlook

From a technical perspective, Matias notes: "The pair holds an upward tone, having shown strength today after overcoming a weak start of the day and then when it broke above 0.7500. It posted the second highest daily close since March and a test of the 0.7580 - 0.7600 region could be on the cards. Momentum in the daily chart looks even more bullish today with price moving away from the 20 DMA."

"A clear break of 0.7600 could trigger a bullish run to the next resistance area around 0.7670. In the shorter term, technical indicators point to the upside, but the RSI has flattened still below the 70 line but not yet pointing to the downside. A correction toward 0.7500 would not create strong damage, but if it extends below, the short term tone could start favoring the US dollar" Matias adds.