AUD/USD inching back closer to 26-month tops post-RBA

The AUD/USD pair held on to the upbeat Chinese PMI-led gains and is currently placed closer to daily tops post-RBA rate decision, withing striking distance of 26-month highs touched last week. 

The pair had a muted reaction to the RBA announcement, where the central bank left the official cash rate unchanged at 1.5%. The decision was on expected line but the market reaction turned out to be muted as investors seemed uninspired by the central bank's latest comments on domestic labor and housing markets, the outlook for inflation and economic growth, as well the current level of the Australian dollar.

   •  RBA keeps rates on-hold, higher AUD to continue to weigh on price pressures

Meanwhile, today's better-than-expected release of China Caixin manufacturing PMI, at 51.1 for July vs. 50.4 expected remained supportive of the bid tone surrounding the major.

Technical levels to watch

A follow through selling pressure back below the key 0.80 psychological mark is likely to accelerate the slide towards 0.7960-55 horizontal support en-route the 0.7915-10 support area. Conversely bullish momentum above multi-month highs resistance near 0.8065 level should pave way for continuation of the pair's upwards trajectory even beyond the 0.8100 handle towards 0.8120-25 resistance area.