RBA minutes preview: what to expect in AUD/USD?

The minutes from the RBA are expected at 01.30 GMT.

The Aussie has otherwise been dragged lower on the recent move in thin liquidity by traders over the housing news in NZ. However, the Aussie has been better offered since 0.7659 highs on the 14th July, trading in a chop since the 15th July heavy supply down to 0.7558 and consolidating in a wide range there and 0.7606.

The markets will be paying close attention to these minutes that should reflect much of what the statement's concerns were for, in the main, low inflation. The data will be key to the RBA who will use such information to potentially calibrate policy in August as analysts at Westpac suggested as being a likely senario, "We'll be looking for hints of a low inflation led rate cut." 

Analysts at ANZ suggested,  "RBA minutes might provide clarity on their assessment that “further information should allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate”.

AUD/USD levels to monitor

AUD/USD has a Fibonacci  level at 0.7600 above spot as key initial target before the 0.7630 high and the 78.6% retracement at 0.7688. The 3rd May high at 0.7717 is the next key level. A break of the support at  0.7550/75 zone where spot currently resides, opens a case for the 200 sma on the 4hr at 0.7464.

AUD/USD longer term risks

Longer term, analysts at Westpac explained that the uncertainty generated by Brexit plus further RBA easing should be negative for the AUD during the months ahead. "We target sub-0.72."