AUD/USD - Strong building approvals ignored, 10-yr AU yield stuck at 200-weekly MA

Building approvals in Australia returned to growth in August, but failed to strengthen the bid tone around the AUD/USD pair. The currency pair is actually losing altitude, now trading at 0.7810; down   0.15% on the day.

The losses could be attributed to broad based USD strength in Asia.

Aussie building permits rose 0.4% month on month in August vs., revised 1.2% fall (previously 1.7% fall). The annualized number came-in at 15.5%, its twelfth straight monthly decline. As noted above, the upbeat month on month number failed to lift the Aussie.

AUD/USD repeatedly failed to take out the 1-hour 50-MA over the last 12 hours, finally leading to a drop to a session low of 0.7808. The immediate focus is on the RBA rate decision. A familiar RBA statement could weigh over the Aussie.

• When is the RBA and how could it affect AUD/USD?

Aussie 10-year yield stuck at weekly 200-MA

• The 10-year yield is chipping away at the weekly 200-MA level of 2.886%. A break higher may lift the AUD.

AUD/USD - RBA Scenario Analysis

Kathy Lien from BK Asset Management writes, " there's very little for the RBA to be excited about which is why we believe they will emphasize the challenges the economy faces over the prospects for growth.  Now this would be a departure from RBA Governor Lowe's view back in September when he said lower rates would add to risk in household balance sheets, sending AUD/USD sharply higher but there's no doubt that the economy has weakened. If the RBA is less optimistic, AUD/USD will break support at 78 cents and in the unlikely scenario that they maintain the same level of hawkishness, AUD/USD could bounce to 79 cents."