AUD/USD: Pressured towards 0.7600 as US dollar weigh on commodities, antipodeans
|- AUD/USD stays depressed near one-month low, after four-day losing streak.
- US dollar refreshes three-month high as Treasury yields stay firmer.
- US-China tussle continues, US covid stimulus progress eyed.
- NAB Business Conditions, Business Confidence will decorate calendar ahead of Wednesday’s speech of RBA’s Lowe.
AUD/USD holds lower ground near one-month low, currently wavers around 0.7640, during the initial Asian session on Tuesday. The aussie pair recently dropped for four consecutive days while also testing the lowest level in a month as the US dollar run-up keeps following the Treasury yield rally. Notable factors behind the moves could be traced from the US coronavirus (COVID-19) stimulus progress and fears of reflation.
Bond bears propel greenback…
With the US Senate’s passage of President Joe Biden’s $1.9 trillion covid relief bill, the much-awaited stimulus is only two-step away before reaching Americans. Although this helped equities amid the early hours, traders feared more fund inflow causing the reflation risks and dialing back of the global central banks’ easy money. As a result, US Treasury yields remain firm which in turn helped the US dollar index to rise to the fresh high since November 24, 2020.
Not only the greenback’s strength but a light calendar and downbeat commodities, coupled with the Sino-American tussle, also weighed on the AUD/USD off-late. Gold prices dropped to the fresh nine-month low and WTI also stepped back from the multi-month high. Further, China urged the US to not meddle in Taiwan matters but the UK unlock and chatters that mask compulsion will soon fade favored risk-on mood.
Against this backdrop, Wall Street benchmarks trade mixed by the end of Monday’s trading session despite DJI30 and Nasdaq initially rose to a fresh all-time high.
Looking forward, National Australia Bank (NAB) will publish February month’s Business Confidence and Business Conditions, prior 10 and 7 respectively. Traders will look for clear positive signals ahead of the RBA Governor Philip Lowe’s speech at 22:00 GMT Tuesday. Amid a lack of major data/events, AUD/USD traders should keep their eyes on risk catalysts like the covid/vaccine and unlock updates while also observing US stimulus news as the bill will be voted in the House on Tuesday.
Technical analysis
An ascending trend line from December 21, 2020, currently around 0.7635, holds the key to AUD/USD declines toward the yearly low near 0.7560 and 100-day SMA close to 0.7540. Alternatively, an upside bounce needs to cross February’s low of 0.7691 to recall short-term buyers.
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