AUD/USD consolidates late 2021 gains below 0.7300 amid market’s indecision
|- AUD/USD steps back from six-week high, pressured around intraday low.
- Market players remain divided amid off in major bourses, light calendar.
- Australia records all-time high covid infections, trading in China’s Evergrande shares suspended.
- Final readings of US Markit Manufacturing PMI may entertain intraday traders.
AUD/USD remains on the back foot around an intraday low of 0.7245, down 0.18% on a day during early Monday. In doing so, the Aussie pair reverses from a six-week high portrayed the previous day amid negative headlines at home and China while ignoring firmer US equity futures amid an off in major markets.
Australia, unfortunately, marks another record-high daily covid infection number, 37,152 at the latest per ABC News. Even so, Australia Prime Minister Scott Morrisson said, “We're now at a stage of the pandemic where you can't just make everything free, because when someone tells you they want to make something free someone's always gonna pay for it and it's going to be you."
On a different page, Reuters said, “Worldwide infections hit a record high over the past seven-day period, with an average of just over a million cases detected a day between Dec. 24 and 30.” The news also mentioned, “Over 4,000 flights were canceled around the world on Sunday, more than half of them were the US flights, adding to the toll of holiday week travel disruptions due to adverse weather and the surge in COVID-19 cases.”
Other than the virus woes, concerns over China’s Evergande also weigh on AUD/USD prices. As per the latest update, trading of all structured products of the struggled real-estate firm is on a halt. Additionally, the firm is also instructed by China government to abolish 39 illegal residential buildings.
Amid these plays, S&P 500 Futures print 0.40% intraday gains while the US Treasury bonds remain inactive amid an off in Japan. However, the US Dollar Index (DXY) consolidates near the lowest level in over a month, up 0.24% intraday by the press time.
That said, AUD/USD traders may witness a lackluster day moving forward, which in turn can keep the latest losses on the table. However, final readings of the US Markit Manufacturing PMI for December may offer extra directions to the pair traders.
Technical analysis
Failures to overcome the resistance line of a monthly rising wedge join RSI conditions lingering around the overbought region to portray the bull’s exhaustion. Hence, pullback moves seem to be brewing. Furthermore, a downside break of a two-week-old ascending trend line, around 0.7255, adds to the bearish bias for the AUD/USD prices.
That said, a south-run to the late December’s swing low around 0.7200 becomes imminent while corrective pullback beyond 0.7255 will aim for the wedge’s resistance, near 0.7285.
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