AUD/USD: Bulls and bears jostle around 200-DMA amid subdued markets
|- AUD/USD remains sidelined after snapping five-day winning streak.
- US dollar benefits from mixed sentiment, shrugs off downbeat Treasury yields.
- Aussie covid conditions push for new restrictions in major parts, Delta Plus is the key concern.
- Risk catalysts become the key driver, virus news, Fedspeak get major attention.
AUD/USD seesaws around 0.7560, following the first negative closing in six days, as Asian traders brace for Tuesday. In addition to the mixed concerns and a lack of major data/events, worsening coronavirus (COVID-19) conditions in Australia called for fresh activity restrictions in major parts and weighed on the pair prices.
After Sydney and Darwin, Perth and Peel also enter lockdown as the Oz nation struggles with the Delta Plus variant of covid. “New limits also come into play in parts of Queensland today, with South Australia and the ACT also reintroducing some limits to manage the threat of the Delta COVID-19 strain,” said ABC news.
These conditions pushed New Zealand to turn down the travel bubble with its largest trading partner while some from the global community also joined the list. It should, however, be noted that Australia’s 24% vaccination rate and push for more inoculations keep the pessimism in check.
Elsewhere, risk appetite sours amid a lack of clear signals from the Fed and an absence of major data/events. After the monetary policy decisionmakers’ mixed response to the US Core PCE Inflation, Thomas Barkin, President of the Richmond Federal Reserve Bank, said on Monday, "The Fed has had substantial further progress against the inflation goal".
Amid these plays, US equities closed mixed but the Treasury yields were down the most in over a week whereas the US dollar index (DXY) marked the heaviest daily gains since June 18, up 0.09% around 91.90.
It’s worth noting that traders are waiting for Friday’s US Nonfarm Payrolls (NFP) for clear direction and hence subdued trading may be witnessed before that. Though, China’s official PMIs and Australia’s trade figures can offer intermediate entertainment. Meanwhile, comments from the Fed policymakers and covid updates keep the driver’s seat.
Technical analysis
AUD/USD struggles to find traction between 200-day SMA and the 0.7600 threshold. Bearish MACD and weak Momentum back an attempt to refresh yearly low of 0.7477 on the clear downside past 0.7560 SMA support figures.
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