RBA minutes attempt AUD jawboning, AUD/USD remains resilient

The minutes of the latest RBA rate decision released just now talked about the disinflationary impact of the strong currency and took note of a potential economic slowdown if the AUD extends the rally. 

The jawboning effort seems to have failed, given the AUD/USD has extended gains to a fresh session high of 0.7877. Moreover, the easing in US-North Korea tensions are lifting the AUD and other risk assets this Tuesday morning in Asia. 

The minutes also talked about low wage growth, called for “careful monitoring” of the debt situation, but also expressed confidence that the growth is likely to pick up pace in the second quarter and in 2018 and 2019. 

The spread between the Australia and US 10-year bond remains unchanged around 42 basis points following the minutes release. Ahead in the day, the focus remains on the broader market sentiment and the US retail sales data. 

AUD/USD Technical outlook

FXStreet Chief Analyst Valeria Bednarik writes, "the pair remained contained by a daily descendant trend line coming from early August, and while still in range, the scale is lean towards the downside as in the 4 hours chart, the price remains below its 20 SMA, whilst technical indicators turned south, entering bearish territory. The mentioned trend line stands this Tuesday around 0.7890, while last week's low at 0.7838 is the immediate support, with a break below it opening doors for a steeper decline."