AUD/USD drops towards 0.7700 on US dollar strength, Victoria lockdown
|- AUD/USD prints three-day downtrend, refreshes intraday low of late.
- Australia’s Q1 Private Capital Expenditure jumped 6.3%, China Industrial Profits eased.
- Victoria announces seven-day lockdown to tame virus resurgence.
- Risk-tone sours amid mixed messages, strong US Treasury yields.
AUD/USD stands on the slippery ground near 0.7725, down 0.24% intraday, during early Thursday. The double whammy of strong US dollar and the coronavirus (COVID-19)-led lockdown in Victoria weighs down the Aussie pair during the third day of losses.
The US dollar index (DXY) extends its recovery moves from early January lows, up 0.13% intraday, while following the firmer Treasury yields.
Elsewhere, the recent uptick in the covid infections leads the Australian government to announce a seven-day lockdown in the second-largest state Victoria. The market’s amplified reaction to the local activity restrictions could be traced to the previous chatters that backed lockdown in only Melbourne, the state capital.
It’s worth mentioning that the Fed’s ability to convince markets of no tapering and China’s commodity crackdown battles US President Joe Biden’s readiness to extra infrastructure talks and vaccine optimism to trouble AUD/USD traders, due to the pair’s risk-barometer status.
Talking about data, Australia’s Private Capital Expenditure for the first quarter (Q1) crossed 2.0% market consensus and 3.0% previous readouts with a 6.3% jump. Further, China's Industrial Profits eased to 57.0%, below 92.3% YoY previous readouts in April.
Amid these plays, S&P 500 Futures drops 0.17% and the stocks in Asia-Pacific are also mildly offered despite Wall Street’s modest gains on Wednesday.
Given the lack of major data/events ahead of the US session, Aussie traders may take clues from the US dollar moves and covid headlines. However, the US Durable Goods Orders for April and Weekly Jobless Claims may offer clearer directions afterward.
Read: US Durable Goods Orders April Preview: Jobs should equal spending
Technical analysis
100-day SMA near 0.7725 and a three-week-old support line near 0.7710 become crucial immediate supports to watch for AUD/USD sellers.
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