AUD/USD recovering to around 0.7760 with stocks ahead of the RBA

• The AUD/USD has recovered from the lows and trades around A$0.7760.
• Trump's tariffs remain the key driver ahead of the RBA decision later on.
• The technical picture for the pair remains bearish.

The AUD/USD is trading around 0.7760, balanced on the day and recovering from the lows. The mood in markets has improved. The trading week began with stocks sliding all over the world in fear of a trade war. US President Donald Trump announced higher tariffs on steel on and aluminum on Thursday, sparking responses calling for a retaliation. The President followed up with further tweets on the topic maintaining the topic in the headlines.

Later on, the mood improved as US stocks turned positive, sending the AUD/USD to a high of 0.7770. However, US bond yields then advanced, allowing the US Dollar to recover. 

The US ISM Manufacturing PMI came out at 59.5 points in February, slightly above 59 points expected but below the score of 59.9 seen in January. China, Australia's primary trade partner, set a growth target of 6.5% for 2018, the same as the target for 2017 but lower than the actual growth rate of 6.9%. The announcement had a minor impact on the Australian Dollar.

The most significant event for Australia is the RBA decision due on Tuesday at 3:30 GMT. The RBA is expected to leave the interest rate unchanged at 1.50%, the rate it has been at since August 2016. The accompanying statement will be of high importance. 

AUD/USD Technical Analysis

The AUD/USD is trading below the 50-day and the 200-day Simple Moving Averages. Moreover, the RSI is below 50 and Momentum is pointing to lower ground. 

Resistance awaits at 0.7780, a trough in mid-February. This is followed by 0.7900, a peak from later in that month and finally, 0.8000, a round psychological number.

0.7710 was a trough early in March. It is followed by 0.7650 that previously worked as a line of resistance and then 0.7550.