AUD/USD retains bid tone after RBA financial stability report

• AUD remains bid as RBA FSR says risks from high-household debt have somewhat abated.
• Trump tempers down Syria threats, puts a bid under risk assets.

The Reserve Bank of Australia (RBA) Financial Stability Report (FSR) released today said the households are coping with the financial stress, but warned dangers still remain.

"Concerns about riskier types of new housing borrowing have eased and most aggregate indicators of financial stress remain low," the RBA said. However, the central bank took note of the risks to the Australian economy from China.

Overall, the FSR carried little that would surprise the traders, leaving the AUD/USD largely unaffected at the session highs around 0.7770.

The Australian currency found bids in early Asia as global stocks clocked three-week highs after the US President Trump tweeted that an attack on Syria “could be very soon or not so soon at all,” thereby tempering fears of an immediate war. Also, Trump asked his trade advisers to look at re-joining the Trans-Pacific Partnership, according to a Reuters report.

The currency pair will likely extend gains if the China trade details, due later today, show a pickup in imports of iron ore and copper (key Australian exports).

AUD/USD Technical Levels

A break above 0.7783 (descending 50-day MA) would expose the 200-day MA lined up at 0.7813 and 0.7835 (falling channel resistance). On the downside, a violation at 0.7751 (session low) could yield a pullback to 0.7712 (March 1 low) and 0.77 (psychological support).