AUD/USD bounces off intraday low above 0.7700 on strong Australia Retail Sales
|- AUD/USD picks up bids on upbeat Aussie catalysts.
- Australia Retail Sales grew past-1.0% forecast to 1.4% MoM in March.
- Market sentiment remains sluggish amid covid fears, US dollar keeps recovery moves.
- Risk catalysts remain the key amid a light calendar going forward.
AUD/USD recovers from the day’s low of 0.7715 to around 0.7730 following Australia’s upbeat Retail Sales release during early Wednesday. It should, however, be noted that the risk aversion wave, mainly due to the covid woes, tames the bulls.
Australia’s Retail Sales grew 1.4% MoM versus 1.0% expected and -0.8% previous contraction, per the preliminary readings for March. Earlier in the day, Australia’s Westpac Leading Index rose past-0.01% MoM to 0.38% but the AUD/USD prices couldn’t ignore the risk-off mood and stay downbeat.
Read: Aussie Retail Sales beats with 1.4% vs 1% expected, AUD steady
Although Australian media raised hopes of the home-made covid vaccines like Pfizer and Moderna, the estimated manufacturing set-up time of three years dash the optimism especially when the virus resurgence weighs on the mood off-late.
Global coronavirus (COVID-19) cases rose 12% on the weekly basis wherein India was, unfortunately, topping the chart. It’s worth mentioning that Japan is also looking for recalling the virus-led emergencies in Tokyo and surrounding prefectures as news infections escalate.
On a different horizon, the US-China tussles get bitter with Beijing’s firm ‘No’ to the West when it comes to the dragon nation’s internal affairs. Further, no strong developments on the America-Iran talks and escalating tension surrounding the Russia-Ukraine tussles also weigh on the market sentiment.
Amid these plays, S&P 500 Futures print mild losses whereas the US 10-year Treasury yields and the US dollar index (DXY) extend the previous day’s recovery moves.
Having witnessed the initial market reaction to the key Aussie data, AUD/USD traders should keep their eyes on the risk catalysts for a fresh direction. Given the virus woes dimming the vaccine and stimulus hopes, the quote is likely to remain pressured unless any strong positives pop up, mainly relating to the infections or the remedy.
Technical analysis
AUD/USD stays above the 50-day SMA level, around 0.7720, on a daily closing despite the latest pullback, which in turn keeps buyers hopeful to aim for the 0.7800 resistance.
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