FxWirePro: AUD/USD holds gains above 0.73 handle, RBA's Debelle expresses lack of conviction in negative interest rate policy

AUD/USD chart - Trading View 

AUD/USD holds gains above 0.73 mark despite disappointing trade balance numbers as the risk-on mood favors Aussie bulls. The major was trading 0.36% higher on the day at 0.7312 at around 03:50 GMT, after closing 0.22% lower in the previous session.

Australian Bureau of Statistics (ABS) flashed mixed signals for October month’s trade numbers during Tuesday’s Asian session. Australia Trade Surplus eased from 5,630M prior to 4,840M in October, but Exports and Imports marked notable recovery to 6% and 8% respectively from +3.9% and -5.9% in the prior month.

The Reserve Bank of Australia's (RBA) Deputy Governor Guy Debelle expressed lack of conviction in negative interest rate policy to boost inflation and employment. Debelle said that the Australian dollar has seen a notable depreciation since the quantitative easing (bond buying) was first priced in by markets. He noted that it is unlikely that inflation will rise too high in the next three years and that there is little chance for a rate hike in the next three years. 

Expectations of a smooth transition of the US presidency keeps markets buoyed. US President Donald Trump ordered General Services Administration (GSA) to formally begin the power-shift process to President-elect Joe Biden. Rising odds of the much-awaited US coronavirus (COVID-19) stimulus and chatters over ex-Fed Chair Janet Yellen’s likely role as a Treasury Secretary adds to the positive mood.

Price action is consolidating above 200W MA and daily cloud and holds above major moving averages. Major and minor trend are bullish. Momentum indicators are biased higher, volatility is rising and resumption of upside will see test of 78.6% Fib at 0.7573. Daily cloud offers strong support. Break below will see weakness in the pair. Supports align at 0.7190 (55-EMA), 0.6963 (23.6% Fib), 0.6844 (200-DMA).