AUD/USD: Range bound above 0.7600, Aussie Trade Balance in focus
|- AUD/USD eyes the upper-end of an immediate trading region.
- RBA’s Lowe copied the central bank’s downbeat comments but risk-on mood saved the day.
- Markets remain upbeat amid US stimulus hopes, vaccine news and welcome data.
- Aussie Trade Balance for goods, per preliminary release, grew $8,956M in December.
AUD/USD picks up bids above 0.7600, currently around 0.7625, during the initial hour of Thursday’s Asian session. Even so, the quote stays in the small range between 0.7600 and 0.7627. The aussie pair benefited from trade-positive sentiment and mostly welcome data despite RBA Governor’s downbeat comments. Australia’s December Trade Balance figures can offer fresh direction but the risk catalysts keep the driver’s seat.
Risk-on favors bulls but USD gains challenge AUD/USD…
US Democratic Party members are trying, by all means, to get President Joe Biden’s $1.4 trillion aid package through the Senate even as Republicans raise barriers. Also supporting the need for a heavy stimulus were recent comments from the Fed policymakers and Treasury Secretary Janet Yellen. The latest chatters suggest Republicans have eased their demand from a $600 billion asset package to somewhere near a $900 billion aid bundle while Democrats are pushing for a $1400 paycheck.
Other than the stimulus talks, vaccine news was also positive to the mood. Europe is up for getting more vials and fresh data concerning more vaccine trials convey optimism. Additionally, Switzerland and New Zealand give initial approvals to covid vaccines. It should be noted that the recently receding coronavirus (COVID-19) numbers also favor the market’s optimism.
Australia’s better than forecast Building Permits and a notable improvement in the US key figures, namely ISM Services PMI and ADP Employment Change, also helped the traders to remain positive. There are chatters that the ex-ECB President Mario Draghi's likely arrival as Italy’s Prime Minister offer distant positive to markets.
Amid these plays, Wall Street benchmarks closed mixed while the US 10-year Treasury yields grew 3.3 basis points to 1.14% by the end of Wednesday’s trading.
Looking forward, Australia’s Trade Balance for December, prior 5022M, is likely to offer immediate direction. Although preliminary figures for goods suggest improvement in data, any positive outcome may have a short-term reaction while odds of negatives to recall sellers are high. It’s worth mentioning that risk catalysts like US relief package news, COVID-19 and vaccine updates shouldn’t be missed as well.
Technical analysis
Despite bouncing off 50-day EMA, currently around 0.7595, AUD/USD buyers jostle with the one-week-old resistance line. Also acting as an extra upside filter is the 0.7640-45 area including multiple stops marked since December 17.
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