AUD/USD: Struggles to keep recent gains around mid-0.7600s
|- AUD/USD eases from weekly top after a notable rebound from 0.7585.
- Market sentiment stays mixed amid virus woes and strong US data.
- Strong US bond auction weighed down yields and dragged down US dollar too.
- Australia’s Westpac Consumer Confidence for April, Powell’s speech will be crucial.
AUD/USD bulls catch a breather around 0.7642, following a stellar run-up from 0.7585 to refresh the weekly top, amid the early Wednesday morning in Asia. In doing so, the aussie pair consolidates recent gains, mainly earned through the weaker US dollar, amid a lack of major fresh catalysts.
Nothing but the greenback weakness…
While AUD/USD is considered a risk-barometer, Wednesday’s run-up in the Aussie prices can’t be traced for market optimism. The reason is that the US dollar index (DXY) dropped to the fresh three-week low and propelled the bulls despite risk-negative news.
Other than the US-China tussle, news that the Johnson & Johnson’s coronavirus (COVID-19) vaccine in the US is stopped from use, for now, due to blood clotting issue gained major attention. Also in the focus were strong demand for the US 30-year bond auction that weighed on the Treasury yields and the US dollar. Furthermore, upbeat US inflation figures, widely expected, for March also weighed on the greenback.
Amid these plays, Wall Street closed mixed, despite S&P 500 Futures refreshing record top above 4,000, whereas the US 10-year Treasury yields down 5.6 basis points (bps) to 1.62%.
Although White House covid Coordinator Zients assured markets of no dearth of covid vaccines even if the Johnson & Johnson jabs are stopped, traders will keep their eyes on the vaccine developments for fresh impulse. Also, China again warned the US to not inch closer to Taiwan and the issue can weigh on the AUD/USD price if escalated.
Elsewhere, Australia’s Westpac Consumer Confidence data for April, prior 2.6%, will decorate the calendar. Ahead of the data, Westpac said, “Developments over the last month have been less upbeat, with yet another state 'mini-lockdown', this time in Brisbane, highlighting that sudden virus-related disruptions are still a risk.”
During the US session, a speech from Fed Chairman Jerome Powell will be important as traders would like to see how Powell reacts to the recent inflation figures and the bond auction.
Technical analysis
An area between 50-day and 100-day EMA, respectively around 0.7675 and 0.7605, guards short-term AUD/USD moves with the 0.7560 acting as an additional filter to the downside.
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