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

Currently, AUD/USD is trading at 0.7568, up 0.24% on the day, having posted a daily high at 0.7575 and low at 0.7545 as we await the RBA minutes.

The RBA left the cash rate rate unchanged at 1.5% earlier this month after cutting for the first time since May in August by 25bp's to record lows. 

However, new RBA Governor Lowe started this year on a positive outlook and instilled confidence in markets that the Australian economy is still on track. Lowe started with a flexible approach to policy and was in no rush to cut interests for the sake of the Central Banks inflation target that is currently running below target. Official records showed that CPI advanced 1.3% on the year in the third quarter of 2016, exceeding forecasts of 1.1% and gaining from the one percent increase from the previous quarter. On a quarterly basis, inflation rose 0.7% beating forecasts of 0.5% and rising from 0.4% in Q2, thus, there has been no need to panic and Lowe remains optimistic. 

So far, leaving rates on hold has worked out while Lowe has called on the government to consider facilitating more infrastructure spending instead. We have seen a better performance in the commodity sector and the risks associated with the mining industry's downtown appear to be abating. There is a slack in the labour market though and China remains a concern still. Just yesterday, the Aussie  dropped on poor data from the Chinese that has revived fears of economic slowdown. Industrial Production in China rose at annualized pace of 6.1% in October, missing expectations of a 6.2% advance, while retail sales in the same month, rose by 10.0% year-on-year, down from previous 10.7%. From the minutes, markets will be looking out for commentary over the strength of the Aussie, US presidential risks, labour markets and ultimately, any indications that a door has been left open for further easing in the future.  USD to continue higher - BBH

AUD/USD levels to monitor

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical indicators have bounced from oversold readings, "But remain below their mid-lines, whilst the 20 SMA presents a strong bearish slope, extending below the 0.7600 level and reflecting the strong selling interest around the pair. A break below 0.7520 should see the pair extending its decline down to 0.7450, the 38.2% retracement of this year early rally."

Meanwhile, current price is 0.7569, with resistance ahead at 0.7575 (Daily High), 0.7590 (Daily 100 SMA), 0.7609 (Daily Classic R1), 0.7617 (Weekly Classic PP) and 0.7622 (Hourly 100 SMA). Next support to the downside can be found at 0.7567 (Yesterday's High), 0.7567 (Daily Classic PP), 0.7551 (Daily Open), 0.7550 (Hourly 20 EMA) and 0.7545 (Daily Low).